Unfortunately that a Sedgefield residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Sedgefield property prices.Where your lease has approximately 90 years left, 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 falls under 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Sedgefield will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. 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 conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Sedgefield with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Sedgefield,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Sedgefield valuers.
Two years ago Ben, came critically near to the 80-year threshold with the lease on his leasehold apartment in Sedgefield. Having bought his home two decades ago, the unexpired term was of minimal relevance. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Ben arranged for a lease extension just in the nick of time in May. Ben and the freeholder via the managing agents subsequently settled on the final figure of £5,500 . If he not met the deadline, the price would have escalated by a minimum £975.
Last Spring we were approach by Mr V Murphy , who completed a basement flat in Sedgefield in March 1998. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Identical homes in Sedgefield with a long lease were valued about £200,800. The mid-range ground rent payable was £65 collected every twelve months. The lease expired on 24 April 2085. Given that there were 60 years unexpired we calculated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 not including fees.
In 2011 we were approached by Mr and Mrs. W Kelly who, having moved into a garden flat in Sedgefield in July 2006. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable residencies in Sedgefield with an extended lease were worth £255,000. The average ground rent payable was £50 invoiced per annum. The lease elapsed on 27 July 2096. Considering the 71 years remaining we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including expenses.