It’s a harsh certainty that a Cromer residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Cromer property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Cromer will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Yorkshire 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. |
Engaging our service gives you enhanced control over the value of your Cromer leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Liam owned a conversion flat in Cromer being marketed with a lease of fraction over sixty years outstanding. Liam on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Liam to exercise his statutory right. Liam procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
Last Winter we were e-mailed by Dr B Bailey , who acquired a one bedroom flat in Cromer in July 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar properties in Cromer with a long lease were in the region of £285,000. The mid-range ground rent payable was £55 invoiced annually. The lease termination date was on 24 October 2104. Taking into account 79 years left we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.
Last Autumn we were approach by Dr Y Kelly , who purchased a ground floor apartment in Cromer in January 2002. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparable residencies in Cromer with an extended lease were valued around £193,400. The mid-range ground rent payable was £65 collected every twelve months. The lease end date was in 2084. Having 59 years left we calculated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of costs.