It’s an underpublicised certainty that a Sedgefield 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 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 below eighty years - otherwise a higher amount will be payable. Most flat owners in Sedgefield will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Engaging our service will provide you better control over the value of your Sedgefield leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Luke was the the leasehold proprietor of a 2 bedroom flat in Sedgefield being marketed with a lease of a little over 59 years left. Luke on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2014 we were phoned by Mr Arthur Wood who, having acquired a garden flat in Sedgefield in July 2003. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Identical homes in Sedgefield with 100 year plus lease were in the region of £210,600. The mid-range ground rent payable was £45 billed every twelve months. The lease lapsed on 27 May 2088. Given that there were 62 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 not including costs.
Mr and Mrs. F Hill bought a ground floor apartment in Sedgefield in November 1998. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by ninety years. Identical properties in Sedgefield with an extended lease were in the region of £265,000. The average amount of ground rent was £50 invoiced annually. The lease elapsed on 20 March 2099. Given that there were 73 years left we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.