Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Cambourne. Clearly, the length of lease remaining reduces as time goes by. This may pass by relatively unnoticed when the property has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension. Eligible long lease owners in Cambourne have the right to extend the lease for an additional ninety years under statute. Please give careful deliberation before putting off your Cambourne lease extension. Putting off that expense now likely increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle Cambourne 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.
Sam owned a 2 bedroom flat in Cambourne being sold with a lease of a few days over 59 years remaining. Sam informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Sam to invoke his statutory right. Sam obtained expert advice and was able to make an informed decision and handle with the matter and sell the property.
Last Winter we were approach by Mr Hugo Richardson , who bought a garden apartment in Cambourne in January 2007. We are asked if we could approximate the price would likely be to prolong the lease by ninety years. Similar flats in Cambourne with 100 year plus lease were worth £168,800. The average amount of ground rent was £60 collected every twelve months. The lease expired in 2081. Having 55 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 plus professional charges.
Dr Alisha Bertrand took over the lease of a one bedroom flat in Cambourne in July 2011. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Comparative homes in Cambourne with 100 year plus lease were worth £235,200. The average ground rent payable was £45 billed per annum. The lease came to a finish in 2092. Taking into account 66 years unexpired we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.