The re-sale value of a leasehold property in Cambridge is impacted by how many years the lease has remaining. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the lease extension process when the lease still has 82 years remaining so that all matters can be addressed prior to the 80 year threshold. Leasehold Reform legislation enables Cambridge qualifying lessees to an additional term of 90 years on top of the existing term, at a notional rent (zero ground rent). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Cambridge with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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 |
Retaining our service will provide you better control over the value of your Cambridge 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.
Half a year ago Theo, came very near to the 80-year threshold with the lease on his one bedroom apartment in Cambridge. Having bought his property 19 years previously, the unexpired term was of minimal significance. Luckily, he recognised he would soon be paying an escalated premium for a lease extension. Theo extended the lease just under the wire last September. Theo and the freeholder subsequently agreed on the final figure of £6,000 . If he had missed the deadline, the price would have escalated by a minimum £950.
In 2012 we were called by Mr V Torres who, having completed a one bedroom flat in Cambridge in September 2008. The dilemma was if we could estimate the price would be for a 90 year lease extension. Comparative premises in Cambridge with an extended lease were in the region of £200,800. The mid-range amount of ground rent was £65 invoiced yearly. The lease termination date was on 20 June 2086. Considering the 60 years outstanding we approximated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 not including expenses.
In 2009 we were e-mailed by Mr and Mrs. R Rodríguez who, having purchased a garden flat in Cambridge in November 2002. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Comparable homes in Cambridge with 100 year plus lease were worth £260,000. The average amount of ground rent was £50 collected every twelve months. The lease came to a finish in 2097. Given that there were 71 years left we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.