Unfortunately that a Caddington residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Caddington property prices.Where your lease has approximately ninety years left, 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 falls under eighty years - otherwise a higher amount will be payable. Most leasehold owners in Caddington will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you better control over the value of your Caddington leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aarav was the the leasehold owner of a high value flat in Caddington on the market with a lease of a few days over 72 years outstanding. Aarav informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Aarav to exercise his statutory right. Aarav obtained expert advice and secured satisfactory deal informally and sell the property.
Last June we were approach by Mr N Gunderson , who completed a recently refurbished apartment in Caddington in October 2000. The dilemma was if we could estimate the price would be for a 90 year extension to my lease. Comparable residencies in Caddington with a long lease were valued about £227,800. The average amount of ground rent was £45 invoiced per annum. The lease end date was in 2090. Taking into account 65 years outstanding we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of fees.
Last month we were called by Mr and Mrs. D Lee , who bought a basement flat in Caddington in March 2008. The question was if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Identical flats in Caddington with 100 year plus lease were worth £275,000. The mid-range amount of ground rent was £55 billed monthly. The lease expired in 2101. Taking into account 76 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.