On the balance of probabilities if you own a flat in Caversham you actually own a long leasehold interest over your property
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Using our service will provide you enhanced control over the value of your Caversham leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eliot owned a high value flat in Caversham on the market with a lease of a little over 61 years left. Eliot on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
Ms Alisha Lefèvre acquired a first floor apartment in Caversham in June 1996. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable premises in Caversham with 100 year plus lease were valued around £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease ran out in 2103. Taking into account 78 years remaining we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus expenses.
Last year we were contacted by Mrs Zoe Reed , who bought a garden apartment in Caversham in July 2006. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Identical flats in Caversham with a long lease were valued about £186,000. The mid-range ground rent payable was £65 collected annually. The lease lapsed on 27 November 2083. Given that there were 58 years remaining we estimated the compensation to the freeholder for the lease extension to be between £24,700 and £28,600 plus costs.