Cranfield residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
Leasehold properties in Cranfield with more than 100 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Cranfield can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Cranfield lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Trailing protracted correspondence with the landlord of her garden flat in Cranfield, Francesca commenced the lease extension process just as the lease was approaching the critical eighty-year deadline. The lease extension completed in August 2009. The landlord’s costs were restricted to less than 700 pounds.
In 2012 we were contacted by Mr and Mrs. P Bell who, having moved into a basement apartment in Cranfield in February 2007. The question was if we could estimate the premium would be to prolong the lease by 90 years. Identical premises in Cranfield with an extended lease were in the region of £264,000. The average ground rent payable was £60 billed yearly. The lease concluded on 6 May 2078. Considering the 53 years left we approximated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 plus legals.
Last Spring we were e-mailed by Mr D Brooks , who acquired a first floor apartment in Cranfield in October 2001. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Identical flats in Cranfield with an extended lease were worth £225,400. The mid-range ground rent payable was £45 collected per annum. The lease terminated in 2089. Considering the 64 years remaining we calculated the premium to the freeholder to extend the lease to be within £16,200 and £18,600 plus professional charges.