Top reasons for Crowthorne lease extension
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<h3> Top reasons for lease extension now:
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<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/crowthorne">Crowthorne</a> lease depreciates with the years remaining on the lease.
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<p> Unfortunately that a Crowthorne residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Crowthorne property market.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 falls under 80 years - otherwise a higher amount will be due. Most flat owners in Crowthorne will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
<h4>An extended lease has roughly the same value as a freehold</h4>
<p> It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
<h4>Lending institutions may not finance a property with a short lease</h4>
The propensity since over the last decade has been for lenders to tighten lending requirements generally - this has extended to the types of security over which the home loan is to be granted. This has resulted in the minimum number of years remaining under the lease required by banks has increased. Historically banks would lend on a lease with twenty years plus the term of the loan - typically 50 year leases but those requirements have been chipped away by the requirement for longer and longer leases - many use a minimum term of 75 years as a prerequisite.
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<td>Leeds Building Society</td>
<td> 85 years remaining from the start of the mortgage.
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<td>National Westminster Bank</td>
<td> Mortgage term plus 30 years.<br /><br />For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage.
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<td>Nationwide Building Society</td>
<td> - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years. <br />- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).<br /><br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- 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 <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br />- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. <br /><br />New build property:<br />- 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)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />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.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 55 years<br />- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- 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<br />- Ground Rent is compounded RPI<br />- Ground Rent review period is less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 55 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (Will be declined)<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- 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<br />- A lease subject to a peppercorn Ground Rent (Annual Rent) charges<br /><br />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. <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- 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?<br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years.<br /><br />Lease Extensions<br /><br />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 you become aware that it does not meet these requirements, please refer to Issuing Office. <br /><br />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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<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
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<td>Yorkshire Building Society</td>
<td> 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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<h4> Get in touch with one of our Crowthorne lease extension solicitors or enfranchisement solicitors
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<p> Retaining our service will provide you enhanced control over the value of your Crowthorne leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell.
The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Crowthorne Lease Extension Example Cases:
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<h5> Aaron, Crowthorne, Berkshire</h5>
<p> Twenty four months ago Aaron, started to get near to the eighty-year threshold with the lease on his two bedroom apartment in Crowthorne. In buying his flat 19 years previously, the lease term was of little interest. Fortunately, he recognised he would imminently be paying an escalated premium for Extending the lease. Aaron extended the lease just in the nick of time in June. Aaron and the freeholder in the end agreed on an amount of £5,500 . If the lease had descended below eighty years, the figure would have become more exhorbitant by a minimum £900.
<h5>Crowthorne case:</h5>
<p> Mr C Parker owned a garden flat in Crowthorne in January 2009. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Identical residencies in Crowthorne with an extended lease were valued about £246,800. The average ground rent payable was £60 billed yearly. The lease finished in 2076. Given that there were 50 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 plus professional charges.
<h5>Crowthorne case:</h5>
<p> Mrs R Bailey owned a studio apartment in Crowthorne in April 2001. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparative residencies in Crowthorne with 100 year plus lease were valued around £208,200. The average amount of ground rent was £65 collected per annum. The lease ran out in 2087. Taking into account 61 years left we approximated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 plus professional charges.
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