Sherwood leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Most owners of residential leasehold property in Sherwood enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Sherwood you really ought to investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Sherwood leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Finn owned a conversion flat in Sherwood being sold with a lease of a few days over fifty eight years outstanding. Finn informally spoke with his landlord being a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Finn to invoke his statutory right. Finn obtained expert legal guidance and was able to make a more informed decision and deal with the matter and sell the flat.
In 2011 we were approached by Dr Natasha Wright who, having bought a garden apartment in Sherwood in June 2003. The question was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Comparable properties in Sherwood with a long lease were valued about £176,200. The mid-range ground rent payable was £65 invoiced annually. The lease ran out in 2082. Given that there were 56 years outstanding we calculated the premium to the landlord to extend the lease to be between £29,500 and £34,000 plus professional charges.
In 2011 we were e-mailed by Mrs Rachel Patel who, having completed a basement flat in Sherwood in October 2001. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparative residencies in Sherwood with an extended lease were valued about £237,600. The mid-range ground rent payable was £45 billed monthly. The lease lapsed in 2093. Considering the 67 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 plus costs.