For those whose Crick flat is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Crick leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of unsuccessful discussions with the freeholder of her garden apartment in Crick, Jordan started the lease extension process as the eighty year threshold was fast advancing. The lease extension was concluded in July 2007. The landlord’s charges were restricted to slightly above 700 pounds.
Last month we were approach by Mr E Mitchell , who purchased a ground floor apartment in Crick in September 1995. We are asked if we could estimate the price could be for a 90 year lease extension. Similar premises in Crick with 100 year plus lease were valued around £232,800. The mid-range amount of ground rent was £45 invoiced annually. The lease elapsed in 2091. Having 65 years as a residual term we estimated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including professional charges.
In 2013 we were phoned by Mr and Mrs. E Laurent who, having moved into a one bedroom flat in Crick in April 2003. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Similar flats in Crick with an extended lease were valued about £275,000. The average amount of ground rent was £55 billed per annum. The lease expired on 2 August 2102. Taking into account 76 years outstanding we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.