The market value of a leasehold property in Cudham depends on how many years the lease has left to run. If it is near to or less than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised well before the eighty year cut off point. Current legislation entitles Cudham qualifying lessees to an additional term of ninety years on top of the remaining term, at a peppercorn rent (no ground rent). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Cudham with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
Hunter owned a 2 bedroom apartment in Cudham on the market with a lease of fraction over sixty years remaining. Hunter on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree 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 25 years thereafter. No ground rent would be payable on a lease extension were Hunter to exercise his statutory right. Hunter obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Last June we were approach by Mrs Alisha Harris , who bought a newly refurbished flat in Cudham in August 2003. We are asked if we could estimate the premium would be for a ninety year lease extension. Identical premises in Cudham with a long lease were worth £255,000. The average amount of ground rent was £50 collected annually. The lease concluded on 14 June 2095. Given that there were 70 years remaining we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.
An example of a Lease Extension case for a Cudham property 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 unexpired lease term was 50.57 years.