The rule of thumb is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Cambourne can extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do think carefully before delaying your Cambourne lease extension. Postponing that expense now simply increases the premium you will ultimately have to pay to extend the lease.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly 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 decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Using our service gives you increased control over the value of your Cambourne leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Muhammad owned a 2 bedroom flat in Cambourne on the market with a lease of just over sixty years remaining. Muhammad informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Last October we were contacted by Mr and Mrs. F Cook , who took over the lease of a one bedroom apartment in Cambourne in April 2005. We are asked if we could approximate the price could be for a 90 year lease extension. Similar homes in Cambourne with a long lease were valued about £280,000. The mid-range ground rent payable was £55 billed monthly. The lease expired on 9 April 2102. Having 78 years unexpired we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.
Mr and Mrs. E Clark completed a garden flat in Cambourne in January 2006. The dilemma was if we could approximate the price could be for a ninety year lease extension. Similar properties in Cambourne with 100 year plus lease were valued around £191,000. The average ground rent payable was £65 collected every twelve months. The lease came to a finish in 2082. Having 58 years unexpired we estimated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 exclusive of expenses.