Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Cambridge. Inevitably, the length of lease remaining reduces as time goes by. This may pass by relatively unnoticed when the flat or house needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to extend the lease. Eligible leaseholders in Cambridge have the right to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. You should give careful consideration before delaying your Cambridge lease extension. Putting off the cost now likely increases the price you will ultimately incur to extend your lease
Leasehold residencies in Cambridge with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Lease extensions in Cambridge can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Cambridge lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following lengthy correspondence with the landlord of her first floor apartment in Cambridge, Madeleine commenced the lease extension process just as her lease was nearing the all-important eighty-year mark. The transaction was finalised in May 2007. The landlord’s fees were negotiated to approximately 600 pounds.
Last Spring we were called by Dr N Gunderson , who bought a recently refurbished apartment in Cambridge in June 2005. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparable properties in Cambridge with an extended lease were valued around £261,600. The average amount of ground rent was £60 collected yearly. The lease expired on 28 August 2078. Given that there were 52 years as a residual term we approximated the premium to the landlord to extend the lease to be within £39,000 and £45,000 plus fees.
Dr Arthur Simon acquired a basement flat in Cambridge in October 2009. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar premises in Cambridge with 100 year plus lease were valued about £218,000. The average ground rent payable was £45 invoiced annually. The lease elapsed on 13 January 2089. Having 63 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 plus costs.