The market value of Calcot leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the unexpired lease term is less than eighty years
It is generally accepted that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Calcot 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.
Finley was the the leasehold owner of a conversion flat in Calcot on the market with a lease of a few days over 61 years remaining. Finley informally contacted his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Finley to exercise his statutory right. Finley procured expert advice and was able to make an informed decision and deal with the matter and sell the property.
In 2011 we were contacted by Dr Hollie James who, having took over the lease of a basement flat in Calcot in October 1996. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Identical properties in Calcot with 100 year plus lease were worth £174,200. The average ground rent payable was £55 invoiced annually. The lease finished on 25 February 2076. Given that there were 51 years left we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 not including legals.
Dr Jasper Ricardo bought a one bedroom flat in Calcot in November 2007. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparative residencies in Calcot with a long lease were valued about £280,000. The average amount of ground rent was £45 billed yearly. The lease ran out in 2096. Taking into account 71 years remaining we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.