Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Camborne. Clearly, the term of lease left reduces over time. This may pass by relatively unnoticed when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Camborne have the legal entitlement to extend the lease for an additional 90 years in accordance with legislation. Do give careful attention before delaying your Camborne lease extension. Holding off that expense now likely increases the price you will eventually have to pay to extend your lease
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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 are not acceptable. 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; |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancers that we work with undertake Camborne 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.
Jacob owned a 2 bedroom flat in Camborne on the market with a lease of a few days over sixty years outstanding. Jacob informally contacted his freeholder a well known Bristol-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 new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Jacob to exercise his statutory right. Jacob procured expert legal guidance and secured an acceptable deal without going to tribunal and sell the property.
Last Winter we were contacted by Ms I Cox , who acquired a one bedroom flat in Camborne in April 2000. The dilemma was if we could estimate the premium would be to extend the lease by 90 years. Comparative flats in Camborne with 100 year plus lease were valued about £250,000. The average ground rent payable was £50 invoiced yearly. The lease termination date was in 2095. Given that there were 69 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Last Summer we were phoned by Dr M White , who owned a basement apartment in Camborne in June 2012. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical homes in Camborne with 100 year plus lease were worth £285,000. The average ground rent payable was £55 invoiced yearly. The lease finished in 2106. Taking into account 80 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.