If you are facing a significant premium because your lease in Crook has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should start your Crook lease extension today:
A Crook lease depreciates with the years remaining on the lease.
There is no doubt about it a leasehold flat or house in Crook is a wasting asset as a result of the shortening lease. If the lease has, beyond one hundred years remaining then this decrease may be fractional however there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the primary rational as to why you should extend the lease without delay. Many flat owners in Crook will meet the qualifying criteria; that being said a lawyer should be able to confirm if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Crook property with a lease extension is almost the same value as a freehold
Leasehold residencies in Crook with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
Banks and Building Societies will not issue a mortgage on a short lease
Whether or not the lease is be regarded as a short lease varies by mortgage company, yet banks and building societies start to get concerned at around 75 years. This may be problematic once you wish to dispose of or refinance your flat as it will be effectively unmortgageable. Even though you may have no immediate plan to sell but when you do your buyer will need to wait 2 years before they can exercise the right to a a lease extension.
| Lender |
Requirement
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| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| 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.
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| 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.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| 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.
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Get in touch with one of our Crook lease extension solicitors or enfranchisement solicitors
Retaining our service will provide you enhanced control over the value of your Crook leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell.
The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Crook Lease Extension Case Summaries:
Mollie, Crook, County Durham,
Following unsuccessful discussions with the landlord of her one bedroom flat in Crook, Mollie initiated the lease extension process just as the lease was approaching the critical eighty-year deadline. The legal work was finalised in May 2015. The freeholder’s charges were negotiated to approximately 650 pounds.
Crook case:
In 2011 we were contacted by Dr T Smith who, having acquired a first floor apartment in Crook in June 2004. The question was if we could approximate the price would be to prolong the lease by ninety years. Comparative properties in Crook with an extended lease were worth £295,000. The mid-range ground rent payable was £50 invoiced monthly. The lease terminated in 2101. Taking into account 75 years as a residual term we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.
Crook case:
Dr Elizabeth Green took over the lease of a recently refurbished apartment in Crook in September 2002. We are asked if we could estimate the price would be to prolong the lease by 90 years. Comparative residencies in Crook with an extended lease were in the region of £250,400. The mid-range amount of ground rent was £65 billed monthly. The lease lapsed on 24 March 2090. Given that there were 64 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus professional charges.