For anyone whose Caversham home is held on a long lease, the message is clear – if no remedial action is taken, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| 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. |
| 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 gives you better control over the value of your Caversham leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of protracted discussions with the landlord of her studio apartment in Caversham, Stephanie started the lease extension process just as the lease was nearing the crucial 80-year mark. The transaction was concluded in November 2014. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were approached by Dr Austin Richardson who, having owned a garden apartment in Caversham in September 1999. The dilemma was if we could estimate the price could be to extend the lease by 90 years. Similar residencies in Caversham with 100 year plus lease were worth £256,600. The average amount of ground rent was £60 collected quarterly. The lease elapsed in 2077. Considering the 52 years left we approximated the compensation to the freeholder for the lease extension to be between £41,800 and £48,400 exclusive of fees.
Mr and Mrs. L Mercier bought a purpose-built apartment in Caversham in July 2000. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Caversham with an extended lease were worth £218,000. The mid-range amount of ground rent was £45 collected annually. The lease terminated on 14 September 2088. Taking into account 63 years unexpired we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 plus fees.