With a long leasehold premises in Cubitt Town, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about 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 gets disproportionately more expensive particularly when there are fewer than eighty years left. Residents in Cubitt Town with a lease approaching 81 years unexpired should seriously consider extending it without delay. When a lease has under eighty years left, under the relevant Act the landlord is entitled to calculate and charge a larger amount, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Cubitt Town with more than 100 years left 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 upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Retaining our service will provide you better control over the value of your Cubitt Town leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Nathaniel owned a high value apartment in Cubitt Town on the market with a lease of a little over sixty years left. Nathaniel informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Nathaniel to exercise his statutory right. Nathaniel obtained expert advice and secured satisfactory resolution informally and readily saleable.
Last Autumn we were e-mailed by Mr and Mrs. O Cooper , who purchased a ground floor apartment in Cubitt Town in October 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable residencies in Cubitt Town with an extended lease were in the region of £181,600. The average amount of ground rent was £55 invoiced per annum. The lease ran out in 2077. Considering the 52 years left we estimated the compensation to the freeholder for the lease extension to be within £30,400 and £35,200 plus professional charges.
An example of a Freehold Enfranchisement decision for a Cubitt Town premises 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 affected 3 flats. The unexpired lease term was 101.61 years.