The re-sale value of a leasehold property in Sudbury is impacted by how many years the lease has remaining. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that all matters can be addressed well before the 80 year mark. Statute enables Sudbury qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Sudbury 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 conveyancing solicitor we work with provide it.
Last year Lewis, came perilously near to the 80-year mark with the lease on his two bedroom flat in Sudbury. Having bought his home two decades ago, the lease term was of minimal relevance. Luckily, he recognised he needed to take action soon on Extending the lease. Lewis extended the lease just ahead of time last July. Lewis and the freeholder in the end settled on the final figure of £6,000 . If the lease had dropped below 80 years, the sum would have escalated by a minimum £1,075.
Last Spring we were approach by Mr and Mrs. V Reed , who bought a studio apartment in Sudbury in March 2009. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Comparative flats in Sudbury with an extended lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected quarterly. The lease ended on 13 January 2101. Given that there were 76 years remaining we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension decision for a Sudbury premises is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 74 years.