The value of Sheringham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is below than 80 years
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Sheringham 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 October Jason, came perilously near to the 80-year threshold with the lease on his basement apartment in Sheringham. Having bought his property 18 years ago, the lease term was of little importance. As luck would have it, it dawned on him that he needed to take steps soon on Extending the lease. Jason was able to extend his lease just under the wire last August. Jason and the landlord in the end agreed on a premium of £6,000 . If the lease had gone to less than 80 years, the figure would have escalated by at least £950.
In 2011 we were phoned by Mr Freddie Lee who, having moved into a newly refurbished apartment in Sheringham in May 1997. The question was if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparable flats in Sheringham with 100 year plus lease were worth £183,600. The mid-range ground rent payable was £65 billed yearly. The lease finished in 2082. Having 57 years unexpired we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 plus expenses.
Last year we were called by Mr and Mrs. O Roberts , who completed a one bedroom apartment in Sheringham in March 1995. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Sheringham with 100 year plus lease were worth £242,600. The average amount of ground rent was £45 billed every twelve months. The lease terminated on 11 June 2092. Given that there were 67 years remaining we approximated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of professional charges.