Crickhowell leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Most owners of residential leasehold property in Crickhowell enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Crickhowell you must investigate if your lease has between 70 and ninety years remaining. There are good reasons why a Crickhowell leaseholder with a lease having around 80 years remaining should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with over one hundred 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 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Crickhowell,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Crickhowell valuers.
18 months ago Samuel, started to get close to the 80-year mark with the lease on his ground floor flat in Crickhowell. In buying his property two decades ago, the unexpired term was of minimal interest. Luckily, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Samuel was able to extend his lease at the eleventh hour in August. Samuel and the landlord subsequently settled on a premium of £6,000 . If he not met the deadline, the premium would have increased by a minimum £1,025.
Last Autumn we were called by Mrs S Ramírez , who purchased a ground floor flat in Crickhowell in June 2007. We are asked if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable homes in Crickhowell with a long lease were valued about £246,800. The average ground rent payable was £60 billed annually. The lease concluded on 26 September 2075. Considering the 50 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £44,700 and £51,600 exclusive of costs.
Last June we were phoned by Mr and Mrs. V Robinson , who moved into a first floor flat in Crickhowell in June 2012. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Identical properties in Crickhowell with a long lease were valued about £208,200. The mid-range amount of ground rent was £65 collected quarterly. The lease end date was on 6 April 2086. Taking into account 61 years outstanding we calculated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 not including professional charges.