Unfortunately that a Crawcrook residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Crawcrook property prices.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 below 80 years - otherwise a higher amount will be payable. The majority of flat owners in Crawcrook will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service will provide you better control over the value of your Crawcrook leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Sam was the the leasehold owner of a studio apartment in Crawcrook being sold with a lease of a little over 59 years unexpired. Sam on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Sam to exercise his statutory right. Sam procured expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
In 2011 we were contacted by Dr E Ricardo who, having purchased a garden flat in Crawcrook in March 1999. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Similar premises in Crawcrook with an extended lease were worth £200,000. The average ground rent payable was £50 billed quarterly. The lease terminated in 2103. Considering the 78 years left we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of costs.
Dr K Martin owned a ground floor apartment in Crawcrook in August 2005. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Crawcrook with an extended lease were in the region of £267,600. The average ground rent payable was £65 collected per annum. The lease came to a finish in 2092. Taking into account 67 years unexpired we approximated the premium to the landlord for the lease extension to be between £14,300 and £16,400 exclusive of legals.