When it comes to residential leasehold property in Sherborne, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are less than 80 years left. Anyone in Sherborne with a lease nearing 81 years unexpired should seriously consider extending it without delay. Once a lease has below eighty years outstanding, under the current Act the landlord is entitled to calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. For Shared Ownership, the remaining term of the lease must be at least 30 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. |
Lease extensions in Sherborne can be a difficult process. We recommend you get professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Sherborne lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Tyler owned a studio flat in Sherborne on the market with a lease of fraction over 61 years left. Tyler on an informal basis contacted his landlord being a well known local-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 new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Tyler to exercise his statutory right. Tyler procured expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. K Pérez , who purchased a newly refurbished apartment in Sherborne in March 2008. The question was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Identical homes in Sherborne with an extended lease were worth £240,600. The average ground rent payable was £60 invoiced yearly. The lease expired in 2088. Having 62 years left we calculated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus professional charges.
Mr and Mrs. G Adams was assigned a lease of a purpose-built flat in Sherborne in June 1997. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar residencies in Sherborne with a long lease were valued around £174,200. The mid-range amount of ground rent was £55 collected monthly. The lease ended in 2077. Given that there were 51 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including legals.