With a residential leasehold premises in Sherborne, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are fewer than 80 years left. Residents in Sherborne with a lease nearing 81 years remaining should seriously consider extending it without delay. When a lease has below eighty years outstanding, under the current statute the freeholder can calculate and demand a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold residencies in Sherborne with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Sherborne 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 lawyer we work with provide it.
Last year Nathaniel, started to get near to the eighty-year threshold with the lease on his basement apartment in Sherborne. Having purchased his property twenty years ago, the length of the lease was of little significance. Fortunately, he became aware that he would imminently be paying an inflated amount for a lease extension. Nathaniel arranged for a lease extension just under the wire last August. Nathaniel and the freeholder eventually settled on sum of £6,000 . If the lease had slipped below eighty years, the figure would have increased by at least £1,100.
Last May we were called by Mr Finn Gray , who took over the lease of a purpose-built flat in Sherborne in March 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by ninety years. Similar homes in Sherborne with an extended lease were valued about £166,800. The mid-range ground rent payable was £50 billed every twelve months. The lease terminated in 2076. Given that there were 50 years unexpired we estimated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including costs.
In 2014 we were phoned by Mr and Mrs. S Clark who, having moved into a garden apartment in Sherborne in November 1999. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Comparative residencies in Sherborne with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £45 invoiced per annum. The lease came to a finish on 16 April 2096. Considering the 70 years remaining we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.