Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Cromer. Clearly, the term of lease left reduces as time goes by. This may slip by relatively unnoticed when the residence 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 extend the lease. Qualifying long lease owners in Cromer have the right to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. You should give careful attention before putting off your Cromer lease extension. Holding off that expense now likely increases the price you will eventually have to pay for a lease extension
Leasehold premises in Cromer with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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 |
| 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. |
Retaining our service will provide you increased control over the value of your Cromer leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy negotiations with the freeholder of her basement flat in Cromer, Bethan commenced the lease extension process just as the lease was approaching the critical 80-year deadline. The transaction was finalised in May 2008. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. U Thompson completed a first floor flat in Cromer in April 2008. The question was if we could approximate the premium could be to extend the lease by ninety years. Similar properties in Cromer with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 billed per annum. The lease ended in 2103. Taking into account 77 years remaining we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.
Last Christmas we were approach by Mr and Mrs. I Martínez , who bought a first floor apartment in Cromer in November 2007. The dilemma was if we could approximate the price would likely be for a 90 year extension to my lease. Comparative properties in Cromer with 100 year plus lease were valued around £183,600. The average amount of ground rent was £65 collected quarterly. The lease concluded in 2083. Taking into account 57 years left we estimated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including fees.