Cranfield leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cranfield residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cranfield you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Cranfield with in excess of one hundred years left on the lease are sometimes regarded as a ‘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 buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Cranfield,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cranfield valuers.
Trailing lengthy correspondence with the landlord of her leasehold apartment in Cranfield, Alice initiated the lease extension process as the 80 year threshold was fast coming. The lease extension completed in February 2010. The freeholder’s fees were negotiated to less than 650 GBP.
Last Christmas we were contacted by Mrs T Martinez , who completed a ground floor apartment in Cranfield in March 2000. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Identical premises in Cranfield with 100 year plus lease were worth £218,000. The mid-range ground rent payable was £45 collected per annum. The lease terminated in 2089. Having 63 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 plus legals.
Last Christmas we were called by Mr and Mrs. L Evans , who owned a ground floor flat in Cranfield in September 2004. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Identical premises in Cranfield with an extended lease were valued around £265,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expired in 2100. Considering the 74 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.