Cambridge leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cambridge residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Cambridge you really ought to investigate if your lease has between seventy and 90 years remaining. There are good reasons why a Cambridge leaseholder with a lease having around 80 years left should take action to ensure that a lease extension is put in place without delay
It is generally considered that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with procure Cambridge 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 conveyancer we work with provide it.
James owned a 2 bedroom flat in Cambridge on the market with a lease of a little over 59 years remaining. James informally contacted his freeholder a well known London-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. No ground rent would be due on a lease extension were James to invoke his statutory right. James obtained expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Dr B Lefèvre took over the lease of a garden flat in Cambridge in June 2005. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparable premises in Cambridge with an extended lease were in the region of £168,800. The mid-range amount of ground rent was £60 collected annually. The lease finished on 2 November 2081. Given that there were 55 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.
Last month we were e-mailed by Mr Finn Peterson , who acquired a first floor flat in Cambridge in October 2004. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar properties in Cambridge with 100 year plus lease were in the region of £235,200. The mid-range ground rent payable was £45 collected yearly. The lease lapsed in 2092. Considering the 66 years as a residual term we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.