Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Caversham. Clearly, the length of lease left reduces as time goes by. This is often ignored and only raises itself as an issue when the flat or house has to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Caversham have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. You should give due consideration before putting off your Caversham lease extension. Holding off that expense now simply increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 increased control over the value of your Caversham leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Owen owned a 2 bedroom apartment in Caversham on the market with a lease of a few days over sixty years unexpired. Owen on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Owen to invoke his statutory right. Owen obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
In 2009 we were approached by Mr N Morel who, having moved into a one bedroom flat in Caversham in June 2002. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Comparable homes in Caversham with a long lease were valued about £280,000. The average ground rent payable was £55 billed every twelve months. The lease ended on 14 July 2104. Given that there were 78 years remaining we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including costs.
Mr Omar Johnson owned a ground floor flat in Caversham in June 2010. The question was if we could estimate the price could be for a 90 year lease extension. Comparative premises in Caversham with an extended lease were worth £191,000. The average ground rent payable was £65 invoiced per annum. The lease elapsed on 12 April 2084. Considering the 58 years outstanding we approximated the premium to the freeholder for the lease extension to be between £23,800 and £27,400 not including costs.