The re-sale value of a leasehold property in Caversham depends on how long the lease has remaining. If it is near to or fewer than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be finalised in advance of the 80 year mark. Leasehold Reform legislation enables Caversham qualifying lessees to an additional term of ninety years over and above the remaining term, at a notional rent (no ground rent). 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 properties in Caversham with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 conveyancing solicitor we work with provide it.
After unsuccessful discussions with the freeholder of her two bedroom flat in Caversham, Elizabeth initiated the lease extension process as the 80 year mark was quickly approaching. The legal work completed in June 2007. The freeholder’s fees were restricted to under 600 pounds.
In 2011 we were called by Dr Amber Scott who, having was assigned a lease of a newly refurbished flat in Caversham in September 2003. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Caversham with a long lease were in the region of £255,000. The mid-range ground rent payable was £50 collected yearly. The lease lapsed in 2096. Considering the 71 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.
Mr and Mrs. G Stewart purchased a basement flat in Caversham in February 2002. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparable residencies in Caversham with an extended lease were in the region of £254,200. The mid-range ground rent payable was £60 invoiced annually. The lease end date was on 11 July 2076. Considering the 51 years outstanding we approximated the premium to the freeholder for the lease extension to be between £43,700 and £50,600 not including costs.