Top reasons for Sedbergh lease extension
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<h3> Top reasons for lease extension now:
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/sedbergh">Sedbergh</a> property value </h4>
<p> Unfortunately that a Sedbergh residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Sedbergh property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Sedbergh will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
<h4>Sedbergh property with a lease extension has roughly the same value as a freehold</h4>
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Leasehold properties in Sedbergh with in excess of 100 years unexpired on the lease are often regarded as a ‘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 purchasing the reversionary interest unless savings on ground rent and estate charges justify it. <h4>Banks and Building Societies will not issue a mortgage on a short lease</h4>
Most banks have tightened lending criteria in the last ten years and borrowers are encountering difficulties in arranging finance or re-mortgage against property with shorter lease terms, particularly below seventy years as they are considered to be insufficient for lending purposes.
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<th> Requirement
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<td>Coventry Building Society</td>
<td> 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.
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<td>Halifax</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Leeds Building Society</td>
<td> 85 years remaining from the start of the mortgage.
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<td>Nationwide Building Society</td>
<td> - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years. <br />- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).<br /><br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br />- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. <br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 55 years<br />- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period is less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 55 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (Will be declined)<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house<br />- A lease subject to a peppercorn Ground Rent (Annual Rent) charges<br /><br />For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance. <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?<br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years.<br /><br />Lease Extensions<br /><br />We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office. <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>TSB</td>
<td> Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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Why use us for your lease extension in Sedbergh? </h4>
<p> Retaining our service gives you better control over the value of your Sedbergh leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell.
The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Sedbergh Lease Extension Example Cases:
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<h5> Hugo, Sedbergh, Cumbria</h5>
<p> Half a year ago Hugo, started to get near to the 80-year mark with the lease on his purpose- built apartment in Sedbergh. Having bought his property twenty years ago, the unexpired term was of little bearing. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Hugo extended the lease just ahead of time in July. Hugo and the freeholder via the managing agents eventually settled on sum of £5,500 . If he failed to meet the deadline, the amount would have escalated by a minimum £1,025.
<h5>Sedbergh case:</h5>
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Last Winter we were e-mailed by Mr and Mrs. C Gómez , who
bought a recently refurbished flat in Sedbergh in February 2008. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative homes in Sedbergh with 100 year plus lease were valued about £270,000. The average amount of ground rent was £55 billed per annum. The lease terminated in 2101. Having 75 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.
<h5>Sedbergh case:</h5>
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Last Spring we were e-mailed by Mr D Cox , who
was assigned a lease of a one bedroom apartment in Sedbergh in July 2001. The question was if we could shed any light on how much (approximately) price would be to extend the lease by an additional years. Comparative properties in Sedbergh with a long lease were in the region of £173,800. The mid-range ground rent payable was £65 invoiced monthly. The lease expired on 25 August 2081. Taking into account 55 years remaining we calculated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of fees.
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