Sawston leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Sawston enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Sawston you would be well advised to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| 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. |
| 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. |
| 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. |
Lease extensions in Sawston can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Sawston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Leon owned a conversion flat in Sawston being marketed with a lease of just over fifty eight years outstanding. Leon on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Leon to exercise his statutory right. Leon obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Mr Harvey Bertrand acquired a basement flat in Sawston in June 2004. We are asked if we could estimate the price would be for a ninety year lease extension. Comparable premises in Sawston with 100 year plus lease were valued around £246,800. The mid-range ground rent payable was £60 collected per annum. The lease expired on 8 March 2076. Taking into account 50 years remaining we calculated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 plus costs.
Ms P Gray owned a one bedroom apartment in Sawston in February 2012. The dilemma was if we could approximate the premium would likely be to extend the lease by 90 years. Similar properties in Sawston with 100 year plus lease were in the region of £203,200. The mid-range amount of ground rent was £65 invoiced per annum. The lease finished on 28 February 2087. Given that there were 61 years unexpired we approximated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 exclusive of fees.