Owning a flat usually means owning a lease of the property, which has a set term of years. your lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Cricklade. Clearly, the period of lease left shortens over time. This is often ignored and only becomes a problem when the property has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension. Qualifying long lease owners in Cricklade have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Do give due consideration before delaying your Cricklade lease extension. Holding off that expense now only increases the price you will ultimately incur to extend your lease
Leasehold properties in Cricklade with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Cricklade,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cricklade valuers.
Subsequent to unsuccessful negotiations with the freeholder of her garden flat in Cricklade, Lydia started the lease extension process just as the lease was coming close to the crucial eighty-year deadline. The legal work was finalised in May 2015. The landlord’s fees were kept to an absolute minimum.
Mrs Jennifer Sánchez completed a studio flat in Cricklade in March 2008. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Similar premises in Cricklade with a long lease were worth £168,800. The average amount of ground rent was £60 invoiced monthly. The lease expired in 2080. Given that there were 55 years remaining we estimated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of fees.
In 2014 we were e-mailed by Dr Lauren Scott who, having moved into a one bedroom flat in Cricklade in May 2006. We are asked if we could approximate the price could be to extend the lease by ninety years. Similar residencies in Cricklade with 100 year plus lease were in the region of £235,200. The average ground rent payable was £45 invoiced per annum. The lease elapsed in 2091. Having 66 years outstanding we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.