Caversham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Caversham tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Caversham you would be well advised to see if your lease has between 70 and 90 years remaining. There are good reasons why a Caversham leaseholder with a lease having around 80 years remaining should take steps to make sure that a lease extension is effected without delay
Leasehold residencies in Caversham with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 lawyers that we work with handle Caversham 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.
Mason owned a studio flat in Caversham on the market with a lease of just over fifty eight years outstanding. Mason on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Mason to invoke his statutory right. Mason obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Last year we were e-mailed by Mrs F Leroy , who took over the lease of a one bedroom apartment in Caversham in June 2007. The dilemma was if we could approximate the price would likely be to prolong the lease by 90 years. Identical properties in Caversham with a long lease were worth £218,000. The mid-range ground rent payable was £45 billed yearly. The lease lapsed on 27 October 2088. Considering the 63 years outstanding we estimated the premium to the landlord to extend the lease to be between £17,100 and £19,800 exclusive of costs.
In 2014 we were phoned by Ms E Watson who, having moved into a one bedroom flat in Caversham in September 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Similar flats in Caversham with an extended lease were valued around £265,000. The average amount of ground rent was £50 billed yearly. The lease expiry date was in 2099. Having 74 years outstanding we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.