It’s a harsh certainty that a Cubitt Town residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Cubitt Town property market.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher amount will be payable. Most leasehold owners in Cubitt Town will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold properties in Cubitt Town with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 handle Cubitt Town 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.
In 2014 Leo, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Cubitt Town. Having bought his property two decades ago, the length of the lease was of little interest. Thankfully, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Leo extended the lease just under the wire in September. Leo and the landlord ultimately agreed on an amount of £5,500 . If he not met the deadline, the amount would have gone up by at least £1,075.
Mr and Mrs. L Gunderson completed a purpose-built apartment in Cubitt Town in January 2006. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Similar homes in Cubitt Town with 100 year plus lease were worth £280,000. The average ground rent payable was £45 billed yearly. The lease lapsed in 2097. Having 71 years outstanding we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Cubitt Town flat 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 remaining number of years on the lease was 101.61 years.