When it comes to domestic leasehold premises in Caversham, you are actually purchasing a right to live in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are fewer than eighty years remaining. Residents in Caversham with a lease drawing near to 81 years left should seriously think of extending it without delay. When a lease has under eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Caversham with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| 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 saleable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Henry, started to get near to the eighty-year mark with the lease on his basement apartment in Caversham. Having purchased his home twenty years previously, the unexpired term was of little relevance. As luck would have it, he became aware that he would soon be paying way over the odds for a lease extension. Henry arranged for a lease extension just under the wire last June. Henry and the freeholder eventually settled on a premium of £6,000 . If the lease had gone to less than 80 years, the sum would have gone up by a minimum £1,025.
Mr and Mrs. U Bonnet moved into a garden apartment in Caversham in March 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparative flats in Caversham with 100 year plus lease were valued about £275,000. The average ground rent payable was £55 invoiced per annum. The lease finished on 27 October 2103. Taking into account 77 years outstanding we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus fees.
Mrs Isabella Roux was assigned a lease of a one bedroom flat in Caversham in October 2000. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Comparable residencies in Caversham with 100 year plus lease were worth £183,600. The mid-range ground rent payable was £65 billed monthly. The lease came to a finish on 17 January 2083. Given that there were 57 years left we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 plus expenses.