There is no doubt about it a leasehold property in Sudbury is a wasting asset as a result of the diminishing lease term. Where the residual term has, over 125 years remaining then this decrease may be negligible however there will become a point in time when a lease has under than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should consider extending sooner than later. The majority of flat owners in Sudbury will qualify for this right; however a lawyer can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 gives you enhanced control over the value of your Sudbury leasehold, as your property will be more valuable and saleable 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.
John owned a high value flat in Sudbury being marketed with a lease of a few days over sixty years outstanding. John informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were John to invoke his statutory right. John procured expert advice and secured satisfactory resolution informally and sell the flat.
In 2011 we were approached by Mr Samuel Pérez who, having completed a first floor apartment in Sudbury in July 1996. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparative homes in Sudbury with 100 year plus lease were valued around £189,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease finished in 2079. Taking into account 53 years left we estimated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 not including expenses.
An example of a Lease Extension matter before the tribunal for a Sudbury residence is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case was in relation to 1 flat. The remaining number of years on the lease was 74 years.