Cambourne leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Cambourne residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cambourne you would be well advised to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Cambourne,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cambourne valuers.
Archie was the the leasehold owner of a high value apartment in Cambourne being sold with a lease of a few days over fifty eight years unexpired. Archie on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Archie to invoke his statutory right. Archie obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Autumn we were contacted by Dr Yasmin Phillips , who acquired a one bedroom apartment in Cambourne in July 1996. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Identical premises in Cambourne with a long lease were in the region of £183,600. The mid-range amount of ground rent was £65 collected yearly. The lease ended in 2083. Taking into account 57 years unexpired we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including fees.
Last Autumn we were phoned by Mr O Moore , who acquired a one bedroom apartment in Cambourne in May 2006. The question was if we could approximate the premium could be to extend the lease by 90 years. Identical properties in Cambourne with an extended lease were worth £245,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease ended on 5 January 2094. Given that there were 68 years remaining we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.