For anyone whose Crowland property is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Crowland,the lease extension experts 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 Crowland valuers.
Theo owned a studio flat in Crowland being sold with a lease of just over 59 years outstanding. Theo informally spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Theo to exercise his statutory right. Theo obtained expert legal guidance and secured satisfactory deal without going to tribunal and readily saleable.
In 2009 we were phoned by Mr and Mrs. H Scott who, having was assigned a lease of a one bedroom apartment in Crowland in April 2012. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Identical properties in Crowland with 100 year plus lease were in the region of £181,600. The mid-range amount of ground rent was £55 billed every twelve months. The lease ended in 2078. Taking into account 52 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 plus professional charges.
In 2013 we were e-mailed by Mr and Mrs. S Bell who, having moved into a first floor apartment in Crowland in May 2001. The question was if we could approximate the premium would be to extend the lease by ninety years. Similar residencies in Crowland with a long lease were worth £290,000. The average ground rent payable was £45 billed per annum. The lease terminated in 2098. Given that there were 72 years as a residual term we calculated the premium to the landlord to extend the lease to be between £11,400 and £13,200 plus costs.