Crabtree leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Crabtree tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Crabtree you really ought to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in Crabtree with more than one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Crabtree,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Crabtree valuers.
Subsequent to unsuccessful correspondence with the freeholder of her purpose-built flat in Crabtree, Elizabeth commenced the lease extension process just as her lease was approaching the all-important 80-year deadline. The transaction completed in July 2015. The freeholder’s charges were restricted to below 600 pounds.
In 2013 we were called by Mr Aaron Bell who, having was assigned a lease of a ground floor apartment in Crabtree in August 2010. The question was if we could approximate the premium could be to prolong the lease by a further 90 years. Similar flats in Crabtree with a long lease were valued about £275,000. The average amount of ground rent was £65 billed per annum. The lease lapsed on 10 March 2093. Having 68 years left we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of legals.
Last month we were called by Mr Joshua Sharif , who was assigned a lease of a first floor flat in Crabtree in June 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by ninety years. Comparable residencies in Crabtree with an extended lease were worth £208,600. The average ground rent payable was £60 collected every twelve months. The lease lapsed on 26 July 2082. Given that there were 57 years outstanding we calculated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including professional charges.