Unfortunately that a Sedbergh residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Sedbergh property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining falls below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra 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 conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Using our service gives you enhanced control over the value of your Sedbergh leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leon was the the leasehold owner of a conversion flat in Sedbergh on the market with a lease of a few days over fifty eight years remaining. Leon on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Leon to exercise his statutory right. Leon procured expert advice and was able to make an informed decision and deal with the matter and sell the property.
Mrs H Mason moved into a studio apartment in Sedbergh in March 2007. We are asked if we could estimate the premium could be for a ninety year lease extension. Similar properties in Sedbergh with a long lease were valued about £227,800. The average ground rent payable was £45 invoiced quarterly. The lease came to a finish on 2 July 2090. Given that there were 65 years left we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.
Last Summer we were e-mailed by Mr and Mrs. E García , who completed a purpose-built apartment in Sedbergh in November 2009. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Identical properties in Sedbergh with an extended lease were in the region of £270,000. The average amount of ground rent was £55 invoiced per annum. The lease expired on 6 June 2100. Having 75 years left we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.