Cromer leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Cromer tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Cromer you would be well advised to investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service gives you better control over the value of your Cromer leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful negotiations with the landlord of her garden apartment in Cromer, Madeleine commenced the lease extension process just as her lease was nearing the crucial 80-year deadline. The lease extension was finalised in November 2013. The landlord’s charges were kept to an absolute minimum.
Dr Arthur Moreau bought a garden apartment in Cromer in April 2010. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical residencies in Cromer with 100 year plus lease were worth £186,000. The mid-range amount of ground rent was £65 billed yearly. The lease lapsed in 2084. Taking into account 58 years outstanding we approximated the compensation to the landlord to extend the lease to be within £24,700 and £28,600 exclusive of expenses.
In 2011 we were e-mailed by Mrs Imogen Jackson who, having purchased a first floor apartment in Cromer in October 2005. The question was if we could approximate the premium would likely be to extend the lease by 90 years. Identical premises in Cromer with 100 year plus lease were valued about £250,000. The average amount of ground rent was £50 collected per annum. The lease termination date was on 24 October 2095. Considering the 69 years left we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.