Sheffield residential property owned on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 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 |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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 Sheffield,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Sheffield valuers.
Riley owned a high value flat in Sheffield on the market with a lease of fraction over 59 years unexpired. Riley informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be due on a lease extension were Riley to invoke his statutory right. Riley obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the flat.
Dr Ryan Mason completed a recently refurbished apartment in Sheffield in April 2006. The question was if we could estimate the price would be for a ninety year extension to my lease. Identical premises in Sheffield with an extended lease were in the region of £233,200. The mid-range ground rent payable was £60 collected monthly. The lease finished on 13 July 2087. Considering the 61 years left we approximated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus professional charges.
Last Summer we were called by Mrs Yasmin Michel , who bought a first floor flat in Sheffield in September 2005. The question was if we could approximate the premium would be for a 90 year lease extension. Identical residencies in Sheffield with an extended lease were in the region of £171,800. The average ground rent payable was £55 invoiced annually. The lease lapsed in 2076. Having 50 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 not including expenses.