The value of Crowborough 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 increase substantially once the remaining term is below than 80 years
Leasehold residencies in Crowborough with in excess of one hundred years left 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 purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| Godiva Mortgages | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Crowborough,the lease extension lawyers 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 Crowborough valuers.
Aarav was the the leasehold owner of a high value apartment in Crowborough on the market with a lease of a few days over 72 years unexpired. Aarav informally approached his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Aarav to exercise his statutory right. Aarav obtained expert advice and was able to make an informed decision and deal with the matter and sell the property.
In 2009 we were contacted by Dr Noah Turner who, having acquired a one bedroom flat in Crowborough in August 1998. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Identical residencies in Crowborough with an extended lease were valued about £256,600. The mid-range ground rent payable was £60 invoiced monthly. The lease concluded in 2078. Given that there were 52 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £41,800 and £48,400 exclusive of costs.
Mr George Scott moved into a one bedroom flat in Crowborough in November 2011. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Identical premises in Crowborough with an extended lease were in the region of £218,000. The average amount of ground rent was £45 billed every twelve months. The lease expired on 5 March 2089. Considering the 63 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 exclusive of costs.