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 your lease gets more expensive. It is the case that most Calcot tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Calcot you really ought to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The lawyers 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 lawyer we work with provide it.
Joshua was the the leasehold owner of a high value flat in Calcot being marketed with a lease of a little over 61 years remaining. Joshua informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Joshua to invoke his statutory right. Joshua procured expert legal guidance and secured satisfactory resolution informally and sell the property.
Last Autumn we were approach by Dr S Murphy , who completed a basement apartment in Calcot in May 1996. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Comparative residencies in Calcot with an extended lease were worth £201,200. The average ground rent payable was £55 billed annually. The lease expired on 1 September 2082. Having 56 years unexpired we estimated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 plus legals.
Last year we were contacted by Mr O Carter , who acquired a one bedroom apartment in Calcot in May 2001. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparable properties in Calcot with an extended lease were in the region of £300,000. The average ground rent payable was £50 billed annually. The lease ran out in 2102. Considering the 76 years as a residual term we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus professional charges.