Chances are that if you own a flat in Cottenham Park you actually own a long leasehold interest over your property
Leasehold residencies in Cottenham Park with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Cottenham Park leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Omar, started to get close to the 80-year threshold with the lease on his studio flat in Cottenham Park. In buying his flat two decades ago, the unexpired term was of minimal bearing. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. Omar extended the lease just ahead of time in April. Omar and the landlord in the end settled on the final figure of £5,000 . If the lease had descended lower than 80 years, the amount would have increased by at least £925.
Last Autumn we were phoned by Mr and Mrs. S Scott , who was assigned a lease of a purpose-built flat in Cottenham Park in September 1996. We are asked if we could estimate the price could be to prolong the lease by ninety years. Similar homes in Cottenham Park with 100 year plus lease were valued around £171,800. The mid-range ground rent payable was £55 invoiced quarterly. The lease terminated on 19 January 2075. Considering the 50 years left we estimated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 plus legals.
In 2012 we were approached by Dr B Campbell who, having purchased a studio apartment in Cottenham Park in January 2007. The question was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative premises in Cottenham Park with a long lease were in the region of £280,000. The average ground rent payable was £45 invoiced every twelve months. The lease lapsed on 20 October 2095. Having 70 years outstanding we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.