The market value of a leasehold property in Sudbury is impacted by how long the lease has remaining. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. Ideally one should start the lease extension process when the lease still has 82 years to run so that all matters can be addressed prior to the 80 year mark. Leasehold Reform legislation entitles Sudbury qualifying lessees to acquire a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Sudbury with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges merit 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; |
| 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 |
The conveyancing solicitors that we work with procure Sudbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Subsequent to lengthy negotiations with the freeholder of her first floor flat in Sudbury, Ellen commenced the lease extension process just as her lease was coming close to the crucial 80-year mark. The legal work was concluded in April 2013. The freeholder’s charges were restricted to less than 650 pounds.
Last month we were called by Ms Lauren Stewart , who was assigned a lease of a studio flat in Sudbury in February 2012. We are asked if we could estimate the price would be for a 90 year extension to my lease. Similar premises in Sudbury with an extended lease were valued around £198,800. The average ground rent payable was £55 collected quarterly. The lease came to a finish in 2080. Taking into account 55 years left we approximated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of fees.
An example of a Lease Extension case 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 related to 1 flat. The unexpired residue of the current lease was 74 years.