Cranbrook leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Cranbrook tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Cranbrook you should investigate if your lease has between seventy and ninety years left. There are good reasons why a Cranbrook leaseholder with a lease having around 80 years unexpired should take action to make sure that a lease extension is actioned without delay
Leasehold residencies in Cranbrook with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 |
The conveyancing solicitors that we work with undertake Cranbrook 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.
Last year Rory, came perilously near to the eighty-year mark with the lease on his ground floor apartment in Cranbrook. Having bought his home 19 years ago, the lease term was of no significance. Luckily, he realised he would imminently be paying way over the odds for a lease extension. Rory was able to extend his lease just ahead of time last May. Rory and the freeholder ultimately settled on a premium of £6,000 . If he had missed the deadline, the price would have become more costly by at least £875.
Last month we were called by Mr and Mrs. G Morris , who acquired a recently refurbished apartment in Cranbrook in January 1997. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Similar homes in Cranbrook with an extended lease were in the region of £267,600. The mid-range amount of ground rent was £65 billed yearly. The lease finished on 15 November 2093. Taking into account 67 years unexpired we approximated the premium to the landlord for the lease extension to be within £14,300 and £16,400 exclusive of professional charges.
Last Winter we were contacted by Mr K Davies , who was assigned a lease of a recently refurbished flat in Cranbrook in April 1995. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Comparative homes in Cranbrook with 100 year plus lease were valued about £201,200. The mid-range ground rent payable was £55 billed annually. The lease ran out in 2082. Given that there were 56 years remaining we estimated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.