The re-sale value of a leasehold property in Sawbridgeworth is impacted by how long the lease has remaining. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is ideal to start the lease extension process when the lease still has 82 years to run so that a lease extension can be finalised in advance of the 80 year threshold. Statute entitles Sawbridgeworth qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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 |
| 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. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
Subsequent to unsuccessful negotiations with the freeholder of her basement apartment in Sawbridgeworth, Sian commenced the lease extension process just as her lease was approaching the critical eighty-year threshold. The legal work was finalised in January 2012. The freeholder’s charges were negotiated to a tad over 500 pounds.
Dr Hunter François completed a recently refurbished apartment in Sawbridgeworth in May 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative properties in Sawbridgeworth with an extended lease were valued around £300,000. The mid-range ground rent payable was £50 billed monthly. The lease terminated on 18 August 2102. Having 76 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus expenses.
Mr and Mrs. M Morel completed a purpose-built flat in Sawbridgeworth in June 2001. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Comparable premises in Sawbridgeworth with 100 year plus lease were worth £257,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease expired on 10 August 2091. Taking into account 65 years remaining we approximated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of legals.