Cross Keys residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Engaging our service will provide you enhanced control over the value of your Cross Keys leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Aarav, came perilously near to the 80-year mark with the lease on his studio flat in Cross Keys. Having purchased his property 19 years previously, the unexpired term was of no significance. Luckily, he became aware that he would imminently be paying way over the odds for Extending the lease. Aarav was able to extend his lease just under the wire in August. Aarav and the landlord who owned the flat above ultimately settled on an amount of £6,000 . If he had missed the deadline, the amount would have escalated by at least £1,075.
Last July we were approach by Mr and Mrs. R Collins , who acquired a studio apartment in Cross Keys in July 1999. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Identical properties in Cross Keys with a long lease were valued about £200,800. The mid-range ground rent payable was £65 collected quarterly. The lease came to a finish on 2 July 2085. Taking into account 60 years outstanding we estimated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 not including expenses.
Mr and Mrs. A Ward bought a first floor flat in Cross Keys in November 2008. We are asked if we could approximate the premium could be to extend the lease by 90 years. Comparative homes in Cross Keys with an extended lease were valued about £255,000. The average ground rent payable was £50 collected annually. The lease concluded in 2096. Given that there were 71 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.