As the length of the unexpired term of a Cudham domestic lease diminished so does its value and therefore the value of your property. Where the lease has, in excess of 125 years to run then this decrease may be fractional however there will become a point in time when a lease has under than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should extend the lease without delay. Many flat owners in Cudham will qualify for this right; that being said a conveyancer will be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold premises in Cudham with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
The lawyers that we work with procure Cudham 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 lawyer we work with provide it.
Sebastian owned a high value apartment in Cudham being marketed with a lease of fraction over 72 years left. Sebastian informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. No ground rent would be due on a lease extension were Sebastian to exercise his statutory right. Sebastian obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.
Last February we were approach by Mr Alfie Lefèvre , who purchased a ground floor apartment in Cudham in July 1999. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable flats in Cudham with a long lease were worth £280,000. The average ground rent payable was £55 collected every twelve months. The lease lapsed on 16 May 2103. Taking into account 77 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including expenses.
An example of a Lease Extension matter before the tribunal for a Cudham premises is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The remaining number of years on the lease was 50.57 years.