The re-sale value of a leasehold property in Cranfield is impacted by how long the lease has remaining. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that a lease extension can be finalised ahead of the eighty year mark. Current legislation enables Cranfield qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
Using our service gives you better control over the value of your Cranfield leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful negotiations with the freeholder of her purpose-built flat in Cranfield, Francesca initiated the lease extension process as the 80 year mark was swiftly coming. The transaction was concluded in January 2012. The freeholder’s costs were negotiated to slightly above 500 pounds.
In 2013 we were called by Dr Abbie Morgan who, having acquired a garden flat in Cranfield in November 1999. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar residencies in Cranfield with an extended lease were valued around £254,200. The mid-range ground rent payable was £60 collected annually. The lease terminated on 12 November 2077. Having 51 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 plus expenses.
Ms S Baker completed a studio apartment in Cranfield in July 2006. The question was if we could approximate the price would likely be to prolong the lease by an additional years. Similar premises in Cranfield with an extended lease were in the region of £210,600. The mid-range amount of ground rent was £45 collected quarterly. The lease concluded in 2088. Considering the 62 years outstanding we estimated the premium to the landlord for the lease extension to be between £18,100 and £20,800 plus legals.