The market value of Crabtree leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the remaining term is below than 80 years
Leasehold premises in Crabtree with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Lease extensions in Crabtree can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Crabtree lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Off the back of lengthy discussions with the landlord of her basement apartment in Crabtree, Ellen commenced the lease extension process as the 80 year mark was fast coming. The transaction completed in January 2014. The freeholder’s costs were negotiated to approximately 700 GBP.
Last month we were phoned by Dr A Collins , who took over the lease of a one bedroom flat in Crabtree in September 2004. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable properties in Crabtree with an extended lease were worth £285,000. The average ground rent payable was £45 invoiced annually. The lease lapsed on 28 October 2097. Taking into account 71 years left we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of legals.
In 2013 we were contacted by Dr W Morgan who, having took over the lease of a first floor flat in Crabtree in June 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by 90 years. Comparative premises in Crabtree with a long lease were in the region of £225,800. The mid-range ground rent payable was £60 collected annually. The lease finished in 2086. Having 60 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including legals.