Caversham 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 gets more expensive. Legislation has been in place for sometime now which entitles qualifying Caversham residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Caversham you must see if your lease has between seventy and ninety years remaining. There are compelling reasons why a Caversham flat owner with a lease having around 80 years unexpired should take steps to make sure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Caversham 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 conveyancer we work with provide it.
Alfie owned a conversion flat in Caversham on the market with a lease of a few days over 72 years unexpired. Alfie on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord 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 Alfie to exercise his statutory right. Alfie obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2014 we were called by Mr and Mrs. D Norbert who, having completed a newly refurbished flat in Caversham in July 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Caversham with a long lease were in the region of £250,000. The average ground rent payable was £50 billed quarterly. The lease expiry date was on 14 November 2094. Having 69 years left we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.
In 2010 we were called by Dr J Murphy who, having took over the lease of a one bedroom flat in Caversham in January 2010. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Comparative premises in Caversham with an extended lease were in the region of £285,000. The mid-range amount of ground rent was £55 collected annually. The lease ran out on 26 March 2105. Given that there were 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.