The re-sale value of a leasehold property in Castle Cary depends on 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 buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that all matters can be concluded in advance of the eighty year threshold. Current legislation enables Castle Cary qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Castle Cary with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Castle Cary 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 conveyancing solicitor we work with provide it.
Off the back of protracted discussions with the freeholder of her basement apartment in Castle Cary, Anna started the lease extension process just as the lease was coming close to the all-important 80-year mark. The legal work was finalised in September 2015. The freeholder’s fees were kept to an absolute minimum.
In 2013 we were approached by Ms Isabelle Morris who, having completed a one bedroom apartment in Castle Cary in October 1997. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Identical flats in Castle Cary with 100 year plus lease were valued about £250,000. The average ground rent payable was £50 invoiced per annum. The lease terminated on 22 May 2095. Given that there were 69 years remaining we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
In 2012 we were approached by Dr Molly Robinson who, having took over the lease of a studio apartment in Castle Cary in January 2012. The question was if we could estimate the premium could be to extend the lease by an additional years. Comparable properties in Castle Cary with an extended lease were worth £290,000. The average ground rent payable was £60 billed yearly. The lease terminated on 6 February 2106. Having 80 years remaining we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 not including legals.