It’s an underpublicised certainty that a Cookham residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Cookham property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Cookham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold premises in Cookham with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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; |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a landlord in Cookham,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cookham valuers.
Last year Ali, came precariously close to the 80-year threshold with the lease on his first floor apartment in Cookham. In buying his flat 18 years ago, the unexpired term was of no relevance. Luckily, he noticed he would soon be paying way over the odds for a lease extension. Ali was able to extend his lease at the eleventh hour last January. Ali and the freeholder via the managing agents eventually agreed on a premium of £6,000 . If the lease had dropped below eighty years, the sum would have become more costly by a minimum £1,075.
In 2011 we were phoned by Mr and Mrs. M Green who, having purchased a studio apartment in Cookham in November 2010. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical flats in Cookham with an extended lease were valued about £198,800. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease lapsed in 2080. Considering the 55 years outstanding we estimated the premium to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of expenses.
Last Autumn we were e-mailed by Mr and Mrs. H Vincent , who purchased a garden flat in Cookham in September 1996. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Similar residencies in Cookham with a long lease were valued around £295,000. The average amount of ground rent was £50 invoiced monthly. The lease finished on 14 March 2100. Considering the 75 years left we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.