The market value of a leasehold property in Cawthorne is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that a lease extension can be concluded ahead of the 80 year threshold. Current legislation enables Cawthorne qualifying lessees to obtain a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Cawthorne with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify 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; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Cawthorne 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 lengthy correspondence with the landlord of her studio apartment in Cawthorne, Jodie initiated the lease extension process just as her lease was approaching the all-important 80-year deadline. The lease extension was finalised in June 2006. The freeholder’s fees were kept to an absolute minimum.
Last month we were phoned by Dr Michael Moore , who moved into a ground floor flat in Cawthorne in September 2004. The question was if we could estimate the premium could be to prolong the lease by a further 90 years. Similar properties in Cawthorne with an extended lease were worth £242,600. The mid-range ground rent payable was £45 billed monthly. The lease expired in 2092. Taking into account 67 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 not including legals.
Mr and Mrs. I Bernard was assigned a lease of a studio apartment in Cawthorne in July 2011. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparative premises in Cawthorne with 100 year plus lease were worth £280,000. The average ground rent payable was £55 invoiced annually. The lease finished on 23 May 2103. Having 78 years unexpired we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.