On the balance of probabilities if you own a flat in Cranleigh you actually own a long leasehold interest over your property
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with procure Cranleigh 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.
Twenty four months ago Dexter, came very near to the 80-year mark with the lease on his one bedroom apartment in Cranleigh. Having bought his flat twenty years ago, the lease term was of little significance. Thankfully, he realised he would soon be paying an inflated amount for a lease extension. Dexter extended the lease at the eleventh hour last April. Dexter and the freeholder in the end agreed on an amount of £5,000 . If the lease had slipped below eighty years, the price would have gone up by at least £1,025.
Ms B Phillips bought a one bedroom apartment in Cranleigh in April 2007. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Comparative residencies in Cranleigh with a long lease were valued about £176,200. The average amount of ground rent was £65 collected quarterly. The lease expired on 21 February 2081. Having 56 years unexpired we calculated the compensation to the landlord for the lease extension to be between £29,500 and £34,000 not including fees.
In 2014 we were approached by Mr and Mrs. L Torres who, having owned a one bedroom flat in Cranleigh in June 2010. We are asked if we could approximate the premium could be to prolong the lease by a further 90 years. Comparative premises in Cranleigh with a long lease were in the region of £237,600. The average amount of ground rent was £45 invoiced monthly. The lease lapsed in 2092. Taking into account 67 years remaining we calculated the premium to the landlord for the lease extension to be between £11,400 and £13,200 not including costs.