The market value of Cricklewood leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate substantially once the unexpired lease term is less than eighty years
It is generally accepted that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Using our service will provide you better control over the value of your Cricklewood leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Dexter owned a high value flat in Cricklewood being marketed with a lease of just over sixty years remaining. Dexter on an informal basis contacted his freeholder a well known London-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 rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Dexter to invoke his statutory right. Dexter procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Dr P Moore , who completed a one bedroom apartment in Cricklewood in April 2004. We are asked if we could approximate the price could be to extend the lease by ninety years. Identical flats in Cricklewood with a long lease were valued around £200,800. The mid-range ground rent payable was £65 invoiced per annum. The lease elapsed on 20 September 2085. Given that there were 60 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Cricklewood residence is 73 and 73a St. Pauls Avenue in October 2013. the Tribunal held in accordance with section32 and Schedule 6 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the enfranchisement was fifty three thousand three hundred and sixty one pounds (£53,361.00) This case was in relation to 2 flats. The unexpired term was 64.61 and 67.18.