Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Cross Keys. Clearly, the term of lease left reduces as time goes by. This is often overlooked and only raises itself as an issue when the residence needs to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Cross Keys have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Please give careful consideration before putting off your Cross Keys lease extension. Holding off the cost now simply increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Cross Keys with more than 100 years remaining 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 property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Cross Keys lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Following protracted correspondence with the landlord of her first floor apartment in Cross Keys, Natalie initiated the lease extension process as the 80 year threshold was quickly advancing. The transaction was finalised in August 2008. The landlord’s fees were restricted to approximately 500 GBP.
In 2009 we were phoned by Mr and Mrs. L Bell who, having took over the lease of a first floor apartment in Cross Keys in May 2006. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical residencies in Cross Keys with an extended lease were valued around £255,000. The average amount of ground rent was £50 invoiced annually. The lease terminated in 2096. Having 70 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £10,500 and £12,000 not including expenses.
In 2013 we were contacted by Ms U Brown who, having completed a garden flat in Cross Keys in March 2011. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative premises in Cross Keys with an extended lease were valued about £246,800. The mid-range amount of ground rent was £60 billed every twelve months. The lease finished on 15 October 2076. Having 50 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 plus costs.