Cimla leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Cimla enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Cimla you should investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Cimla with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Cimla,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cimla valuers.
Arthur owned a conversion apartment in Cimla on the market with a lease of fraction over 61 years left. Arthur on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Arthur to invoke his statutory right. Arthur procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Last April we were contacted by Mrs O Allen , who took over the lease of a one bedroom apartment in Cimla in July 1997. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical properties in Cimla with an extended lease were valued about £254,200. The mid-range amount of ground rent was £60 billed monthly. The lease ran out on 11 October 2076. Taking into account 51 years unexpired we approximated the premium to the landlord for the lease extension to be between £43,700 and £50,600 exclusive of fees.
Dr B Davies moved into a one bedroom apartment in Cimla in March 2004. We are asked if we could approximate the price could be for a 90 year extension to my lease. Comparable premises in Cimla with a long lease were valued around £210,600. The mid-range amount of ground rent was £45 collected quarterly. The lease came to a finish in 2087. Taking into account 62 years left we approximated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 plus legals.