Caddington leases on residential deteriorating in value. Where your lease has approximately ninety years unexpired, you should start thinking about a lease extension. If lease term is less than 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Caddington will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to check if you qualify. In certain situations you may not qualify. There are prescribed deadlines and procedures to comply with once the process has commenced so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 better control over the value of your Caddington leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alfie was the the leasehold proprietor of a conversion apartment in Caddington being marketed with a lease of fraction over 59 years left. Alfie on an informal basis contacted his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Alfie to invoke his statutory right. Alfie obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
Last year we were called by Mr and Mrs. Y Johnson , who was assigned a lease of a one bedroom flat in Caddington in October 2007. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Identical homes in Caddington with 100 year plus lease were worth £270,000. The mid-range ground rent payable was £55 billed per annum. The lease terminated on 9 March 2101. Taking into account 75 years remaining we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.
Ms Alisha Taylor owned a garden flat in Caddington in June 2011. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical premises in Caddington with 100 year plus lease were in the region of £173,800. The mid-range amount of ground rent was £60 billed quarterly. The lease finished in 2081. Taking into account 55 years left we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including costs.