Crofton leases on residential deteriorating in value. if your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for your lease extension to be in place before the term of the current lease falls under eighty years - otherwise a higher amount will be due. Leasehold owners in Crofton will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In some circumstances you may not be entitled. There are also strict timetables and steps to comply with once the process has commenced so it’s sensible to be guided by a lawyer during the process.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Coventry Building Society | 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The lawyers that we work with undertake Crofton 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 lawyer we work with provide it.
Two years ago Zachary, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Crofton. Having bought his property twenty years ago, the lease term was of little significance. Thankfully, he became aware that he needed to take action soon on a lease extension. Zachary arranged for a lease extension at the eleventh hour in April. Zachary and the landlord subsequently settled on an amount of £6,000 . If the lease had slipped to less than 80 years, the amount would have increased by a minimum £1,075.
In 2014 we were contacted by Ms Melissa Mercier who, having purchased a purpose-built flat in Crofton in August 1998. We are asked if we could approximate the price would be to prolong the lease by ninety years. Comparative homes in Crofton with an extended lease were in the region of £275,000. The average ground rent payable was £55 invoiced per annum. The lease ran out in 2102. Having 77 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 expenses.
Mrs Jennifer Morgan took over the lease of a one bedroom flat in Crofton in August 1995. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Similar properties in Crofton with an extended lease were worth £183,600. The mid-range amount of ground rent was £65 billed per annum. The lease terminated on 19 January 2082. Considering the 57 years left we approximated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 not including fees.