For anyone whose Crofton property is held on a long lease, the message is clear – if you do nothing, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is generally considered that a property with more than 100 years remaining is worth roughly the equivalent 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 many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Lease extensions in Crofton can be a difficult process. We recommend you obtain guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Crofton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Andrew owned a high value apartment in Crofton being marketed with a lease of just over 72 years outstanding. Andrew on an informal basis spoke with his freeholder a well known Manchester-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 initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Andrew to invoke his statutory right. Andrew obtained expert advice and secured an acceptable resolution informally and sell the property.
In 2009 we were approached by Mrs N Moore who, having acquired a one bedroom flat in Crofton in November 2004. We are asked if we could approximate the price would be to prolong the lease by ninety years. Comparable residencies in Crofton with an extended lease were in the region of £264,000. The average ground rent payable was £60 invoiced quarterly. The lease expired in 2079. Having 53 years unexpired we approximated the compensation to the landlord to extend the lease to be within £37,100 and £42,800 plus professional charges.
Mr and Mrs. B King completed a basement apartment in Crofton in November 1999. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Similar residencies in Crofton with 100 year plus lease were in the region of £220,400. The mid-range amount of ground rent was £45 invoiced monthly. The lease expired on 21 February 2090. Having 64 years left we approximated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 not including fees.