Calcot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Calcot tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Calcot you should investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Calcot with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service gives you enhanced control over the value of your Calcot leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the freeholder of her garden apartment in Calcot, Eleanor commenced the lease extension process as the eighty year mark was fast approaching. The legal work was concluded in May 2013. The freeholder’s costs were restricted to less than 600 pounds.
Mr and Mrs. Y Mason purchased a garden apartment in Calcot in July 1995. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Identical properties in Calcot with 100 year plus lease were worth £184,000. The average ground rent payable was £55 invoiced per annum. The lease elapsed in 2079. Given that there were 53 years left we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus expenses.
In 2014 we were approached by Mrs L Patel who, having completed a first floor apartment in Calcot in July 2002. The dilemma was if we could estimate the premium would be to extend the lease by 90 years. Comparable homes in Calcot with a long lease were worth £290,000. The mid-range ground rent payable was £45 invoiced per annum. The lease concluded on 4 October 2099. Given that there were 73 years remaining we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus costs.