When it comes to long leasehold premises in Sudbury, you are in fact renting it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably when there are less than 80 years remaining. Residents in Sudbury with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once a lease has under 80 years outstanding, under the relevant legislation the freeholder is entitled to calculate and demand a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold residencies in Sudbury with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with undertake 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.
Andrew owned a conversion flat in Sudbury on the market with a lease of a little over fifty eight years unexpired. Andrew informally approached his landlord a well known local-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 an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Andrew to invoke his statutory right. Andrew procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
In 2013 we were approached by Mr and Mrs. F Bailey who, having purchased a studio flat in Sudbury in February 2010. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable flats in Sudbury with an extended lease were in the region of £300,000. The average amount of ground rent was £50 billed quarterly. The lease ended on 23 May 2102. Having 76 years left we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
An example of a Lease Extension matter before the tribunal for a Sudbury flat 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 affected 1 flat. The unexpired term as at the valuation date was 74 years.