The market value of a leasehold property in Caversham Heights depends on how long the lease has remaining. If it is near to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that formalities can be addressed prior to the 80 year cut off point. Current legislation enables Caversham Heights qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Caversham Heights with in excess of 100 years remaining on the lease are sometimes 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 merit 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
Using our service will provide you enhanced control over the value of your Caversham Heights leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Freddie, came very close to the eighty-year threshold with the lease on his basement flat in Caversham Heights. Having purchased his property 18 years previously, the unexpired term was of no relevance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Freddie extended the lease just in the nick of time in July. Freddie and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If he had missed the deadline, the premium would have escalated by a minimum £1,075.
Mr N Bennett took over the lease of a first floor flat in Caversham Heights in August 1997. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparable premises in Caversham Heights with 100 year plus lease were worth £245,000. The mid-range ground rent payable was £45 collected quarterly. The lease concluded on 15 July 2093. Having 68 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus fees.
Mr and Mrs. K Peterson owned a garden apartment in Caversham Heights in September 2005. The question was if we could estimate the premium could be for a 90 year lease extension. Comparative residencies in Caversham Heights with an extended lease were worth £285,000. The average ground rent payable was £55 billed every twelve months. The lease expired in 2104. Having 79 years outstanding we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.