Saxmundham residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be worth the same as 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Saxmundham 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.
Jude was the the leasehold proprietor of a 2 bedroom flat in Saxmundham on the market with a lease of a few days over sixty years unexpired. Jude on an informal basis spoke with his landlord a well known London-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 subject to a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Jude to exercise his statutory right. Jude obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Mr and Mrs. N André bought a first floor flat in Saxmundham in January 2004. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Comparable homes in Saxmundham with an extended lease were worth £173,800. The mid-range ground rent payable was £65 collected monthly. The lease expiry date was in 2081. Having 55 years unexpired we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including professional charges.
Last Summer we were phoned by Mrs P Evans , who purchased a studio flat in Saxmundham in June 1998. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Identical properties in Saxmundham with an extended lease were valued around £235,200. The average amount of ground rent was £45 invoiced annually. The lease came to a finish in 2092. Having 66 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus costs.