The re-sale value of a leasehold property in Sedbergh is impacted by how long the lease has left to run. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years remaining so that formalities can be addressed well before the eighty year threshold. Statute entitles Sedbergh qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). 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.
Leasehold properties in Sedbergh with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Sedbergh 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.
Harvey owned a 2 bedroom flat in Sedbergh being marketed with a lease of fraction over 72 years remaining. Harvey on an informal basis approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Harvey to exercise his statutory right. Harvey obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2011 we were contacted by Mrs J Morel who, having acquired a first floor apartment in Sedbergh in February 2004. The question was if we could approximate the premium could be for a ninety year lease extension. Similar residencies in Sedbergh with 100 year plus lease were worth £235,200. The average amount of ground rent was £45 collected annually. The lease lapsed in 2092. Taking into account 66 years remaining we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus fees.
In 2010 we were phoned by Mrs Megan Flores who, having bought a basement apartment in Sedbergh in April 2001. We are asked if we could approximate the premium would likely be to extend the lease by a further 90 years. Similar flats in Sedbergh with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £55 billed annually. The lease ran out on 23 February 2103. Having 77 years remaining we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including fees.