Sherwood leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Sherwood enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Sherwood you should see if your lease has between 70 and 90 years remaining. There are compelling reasons why a Sherwood leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Sherwood with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 conveyancers that we work with handle Sherwood 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 conveyancer we work with provide it.
In the wake of 9 months of lengthy correspondence with the landlord of her purpose-built flat in Sherwood, Leah started the lease extension process just as the lease was coming close to the critical eighty-year mark. The lease extension was concluded in October 2013. The freeholder’s fees were kept to an absolute minimum.
In 2012 we were phoned by Mr and Mrs. P Bertrand who, having bought a one bedroom flat in Sherwood in November 2011. The question was if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Comparable homes in Sherwood with an extended lease were valued about £265,000. The mid-range ground rent payable was £50 billed annually. The lease end date was in 2098. Taking into account 73 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.
Last year we were phoned by Mr F Anderson , who completed a one bedroom apartment in Sherwood in September 2011. The question was 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 Sherwood with 100 year plus lease were valued about £264,000. The average amount of ground rent was £60 invoiced every twelve months. The lease ended on 12 August 2078. Taking into account 53 years unexpired we calculated the premium to the landlord to extend the lease to be between £37,100 and £42,800 not including legals.