For those whose Sawbridgeworth flat is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold residencies in Sawbridgeworth with more than 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with procure Sawbridgeworth 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.
After lengthy negotiations with the landlord of her garden flat in Sawbridgeworth, Holly started the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work was concluded in June 2009. The landlord’s fees were negotiated to less than 450 pounds.
In 2013 we were called by Mr Finn Taylor who, having moved into a basement flat in Sawbridgeworth in September 1995. The dilemma was if we could estimate the premium could be for a ninety year lease extension. Comparative flats in Sawbridgeworth with 100 year plus lease were valued around £260,200. The mid-range amount of ground rent was £65 billed every twelve months. The lease termination date was on 16 June 2091. Having 66 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £16,200 and £18,600 plus expenses.
Dr E Harris completed a first floor flat in Sawbridgeworth in June 1995. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar premises in Sawbridgeworth with an extended lease were valued about £198,800. The average amount of ground rent was £55 billed every twelve months. The lease finished in 2080. Having 55 years left we calculated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of costs.