Unfortunately that a Cross Keys residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Cross Keys property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher premium will be due. Most flat owners in Cross Keys will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Cross Keys with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Cross Keys,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cross Keys valuers.
Callum was the the leasehold owner of a high value apartment in Cross Keys on the market with a lease of just over sixty years unexpired. Callum on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. No ground rent would be due on a lease extension were Callum to exercise his statutory right. Callum obtained expert advice and secured satisfactory resolution informally and readily saleable.
In 2011 we were approached by Mr and Mrs. C Díaz who, having owned a one bedroom flat in Cross Keys in January 2010. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by an additional years. Identical flats in Cross Keys with an extended lease were valued around £265,000. The average amount of ground rent was £55 billed annually. The lease ended on 6 November 2099. Taking into account 74 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of fees.
Last month we were called by Mr and Mrs. C Mason , who took over the lease of a studio apartment in Cross Keys in February 1999. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Similar homes in Cross Keys with 100 year plus lease were valued around £166,400. The average ground rent payable was £60 billed monthly. The lease terminated on 7 April 2079. Having 54 years remaining we estimated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 not including expenses.