For those whose Caterham flat is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 better control over the value of your Caterham leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Michael owned a studio flat in Caterham being marketed with a lease of fraction over sixty years remaining. Michael informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. 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 £50 annually. No ground rent would be due on a lease extension were Michael to exercise his statutory right. Michael procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the property.
In 2011 we were phoned by Mr Adam Wood who, having took over the lease of a studio flat in Caterham in May 2010. We are asked if we could estimate the price could be to extend the lease by ninety years. Similar homes in Caterham with an extended lease were worth £235,600. The average amount of ground rent was £60 invoiced every twelve months. The lease lapsed in 2088. Considering the 62 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Caterham flat is 223 Brighton Road in September 2013. The premium payable for the acquisition freehold of the properties should be £10,934 (Ten thousand,nine hundred and thirty four pounds) This case affected 3 flats. The unexpired lease term was 75 years.