Cambridge leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Cambridge residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cambridge you really ought to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Cambridge with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Regardless of whether you are a tenant or a freeholder in Cambridge,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cambridge valuers.
Subsequent to unsuccessful discussions with the landlord of her studio apartment in Cambridge, Kate initiated the lease extension process as the 80 year deadline was quickly approaching. The transaction was finalised in January 2010. The freeholder’s costs were restricted to under 650 pounds.
Last Christmas we were approach by Mr and Mrs. B Ward , who moved into a purpose-built apartment in Cambridge in September 2000. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparable residencies in Cambridge with a long lease were valued about £270,000. The mid-range amount of ground rent was £55 billed monthly. The lease lapsed on 14 May 2100. Considering the 75 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.
Dr Edward Lefebvre moved into a one bedroom apartment in Cambridge in January 1995. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Identical homes in Cambridge with a long lease were in the region of £168,800. The mid-range ground rent payable was £60 billed quarterly. The lease ran out in 2080. Taking into account 55 years as a residual term we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of fees.