It’s an underpublicised certainty that a Sedbergh residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Sedbergh property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Sedbergh will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold residencies in Sedbergh with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Sedbergh,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Sedbergh valuers.
Off the back of unsuccessful negotiations with the freeholder of her garden flat in Sedbergh, Francesca initiated the lease extension process just as the lease was approaching the crucial eighty-year deadline. The lease extension was concluded in July 2005. The freeholder’s charges were kept to an absolute minimum.
Last Christmas we were e-mailed by Dr J Campbell , who owned a first floor flat in Sedbergh in November 2004. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable flats in Sedbergh with an extended lease were in the region of £280,000. The mid-range ground rent payable was £55 collected monthly. The lease ended on 26 July 2104. Considering the 78 years left we estimated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of expenses.
Dr N David was assigned a lease of a purpose-built apartment in Sedbergh in April 1999. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Comparable flats in Sedbergh with a long lease were in the region of £191,000. The mid-range amount of ground rent was £65 collected yearly. The lease ended in 2084. Considering the 58 years outstanding we approximated the premium to the freeholder to extend the lease to be within £23,800 and £27,400 plus legals.