The value of Caddington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the remaining term is less than 80 years
Leasehold residencies in Caddington with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Caddington 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.
Milo was the the leasehold proprietor of a conversion flat in Caddington being marketed with a lease of a little over sixty years unexpired. Milo informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Milo to exercise his statutory right. Milo obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2014 we were approached by Ms A Davis who, having owned a one bedroom apartment in Caddington in October 2010. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparative residencies in Caddington with a long lease were in the region of £225,400. The mid-range ground rent payable was £45 billed yearly. The lease lapsed in 2089. Given that there were 64 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 not including legals.
Last year we were approach by Mr and Mrs. N Bertrand , who acquired a first floor apartment in Caddington in October 2001. We are asked if we could estimate the price could be to prolong the lease by an additional years. Identical flats in Caddington with 100 year plus lease were in the region of £270,000. The average amount of ground rent was £55 invoiced yearly. The lease came to a finish on 18 April 2100. Taking into account 75 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.