When it comes to residential leasehold premises in Cubitt Town, you effectively rent it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Residents in Cubitt Town with a lease nearing 81 years remaining should seriously consider extending it sooner as opposed to later. When a lease has under eighty years left, under the relevant statute the landlord is entitled to calculate and charge a larger amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold premises in Cubitt Town with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Using our service gives you enhanced control over the value of your Cubitt Town leasehold, as your property will be more valuable and saleable in terms of 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 Summer John, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Cubitt Town. Having purchased his home twenty years previously, the length of the lease was of minimal relevance. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. John arranged for a lease extension just in the nick of time last July. John and the landlord who owned the flat above subsequently agreed on an amount of £5,000 . If he had missed the deadline, the figure would have gone up by a minimum £900.
In 2014 we were contacted by Mrs Y Phillips who, having acquired a basement flat in Cubitt Town in July 2012. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Comparable homes in Cubitt Town with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease concluded on 5 June 2100. Considering the 75 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Cubitt Town residence is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case was in relation to 3 flats. The number of years remaining on the existing lease(s) was 101.61 years.