Cambridge leases on domestic deteriorating in value. if your lease has about 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease drops below this level then you start paying an additional element called marriage value. Leasehold owners in Cambridge will mostly qualify for a lease extension; however a solicitor will check if you qualify. In some circumstances you may not be entitled. There are also strict timetables and formalities to comply with once the process has commenced so it’s wise to be guided by a conveyancing solicitor during the process.
Leasehold premises in Cambridge with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with handle Cambridge lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last year Samuel, started to get close to the 80-year mark with the lease on his one bedroom flat in Cambridge. In buying his home 19 years previously, the unexpired term was of little relevance. Luckily, he realised he would soon be paying an escalated premium for Extending the lease. Samuel extended the lease at the eleventh hour last July. Samuel and the freeholder eventually agreed on an amount of £5,500 . If the lease had descended to less than eighty years, the premium would have gone up by a minimum £1,150.
Last month we were e-mailed by Mr and Mrs. W Hernández , who acquired a newly refurbished flat in Cambridge in November 2009. The question was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Identical homes in Cambridge with 100 year plus lease were worth £264,000. The average ground rent payable was £60 invoiced monthly. The lease came to a finish on 9 September 2078. Given that there were 53 years left we estimated the premium to the freeholder to extend the lease to be within £37,100 and £42,800 exclusive of fees.
Last Summer we were phoned by Mr Henry Wright , who owned a recently refurbished apartment in Cambridge in November 2012. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar flats in Cambridge with 100 year plus lease were valued around £220,400. The mid-range amount of ground rent was £45 invoiced monthly. The lease finished in 2089. Considering the 64 years remaining we approximated the premium to the landlord to extend the lease to be between £15,200 and £17,600 plus fees.