Croston 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 your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Croston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Croston you should check if your lease has between seventy 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
Leasehold properties in Croston with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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. |
| Lloyds TSB Scotland | 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Croston,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Croston valuers.
Austin owned a 2 bedroom flat in Croston being sold with a lease of a little over sixty years left. Austin informally approached his freeholder a well known London-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be payable on a lease extension were Austin to exercise his statutory right. Austin procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. K Bonnet completed a first floor apartment in Croston in May 1999. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Identical premises in Croston with a long lease were worth £246,800. The mid-range ground rent payable was £60 billed monthly. The lease elapsed on 25 August 2075. Taking into account 50 years left we approximated the compensation to the landlord to extend the lease to be within £44,700 and £51,600 plus professional charges.
Last Spring we were e-mailed by Mr D Wright , who acquired a studio apartment in Croston in September 1996. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Comparable homes in Croston with a long lease were worth £203,200. The average amount of ground rent was £65 invoiced every twelve months. The lease concluded on 16 July 2086. Taking into account 61 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 plus expenses.