Unfortunately that a Crowborough residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Crowborough property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Crowborough will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Crowborough leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Muhammad owned a studio apartment in Crowborough on the market with a lease of a few days over 72 years left. Muhammad on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Muhammad to exercise his statutory right. Muhammad obtained expert legal guidance and secured an acceptable resolution informally and sell the flat.
In 2009 we were phoned by Mr Thomas Leroy who, having was assigned a lease of a ground floor apartment in Crowborough in July 2009. We are asked if we could estimate the price could be for a 90 year lease extension. Similar flats in Crowborough with 100 year plus lease were in the region of £237,600. The average ground rent payable was £45 invoiced yearly. The lease ran out in 2091. Given that there were 67 years remaining we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 plus professional charges.
Mr and Mrs. H Bernard moved into a first floor flat in Crowborough in September 2010. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Comparable premises in Crowborough with an extended lease were valued around £280,000. The mid-range amount of ground rent was £55 collected per annum. The lease elapsed on 26 April 2102. Considering the 78 years remaining we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 plus expenses.