Saffron Walden leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Saffron Walden residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Saffron Walden you really ought to check if your lease has between seventy and 90 years left. There are compelling reasons why a Saffron Walden flat owner with a lease having around 80 years left should take action to ensure that a lease extension is effected without delay
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a freeholder in Saffron Walden,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Saffron Walden valuers.
Gabriel owned a high value apartment in Saffron Walden on the market with a lease of a few days over 61 years unexpired. Gabriel informally approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert advice and secured satisfactory deal informally and sell the flat.
In 2009 we were e-mailed by Dr W Williams who, having took over the lease of a garden flat in Saffron Walden in August 2008. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Similar flats in Saffron Walden with an extended lease were valued around £210,600. The average ground rent payable was £45 invoiced yearly. The lease concluded in 2087. Considering the 62 years outstanding we calculated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 plus expenses.
In 2012 we were contacted by Mr and Mrs. G Cox who, having owned a purpose-built apartment in Saffron Walden in July 1998. We are asked if we could estimate the premium could be to extend the lease by 90 years. Comparable premises in Saffron Walden with 100 year plus lease were in the region of £260,000. The mid-range ground rent payable was £50 invoiced monthly. The lease ended on 13 October 2098. Given that there were 73 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus costs.