If you are facing a significant premium because your lease in Sandbanks has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Sandbanks leasehold property depreciates with the years remaining on the lease.
Sandbanks leases on residential properties are gradually losing value. Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for the lease extension to be in place before the term of the existing lease falls below 80 years - otherwise a higher amount will be payable. Flat owners in Sandbanks will mostly be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In certain situations you may not qualify. There are prescribed deadlines and steps to follow once the process is initiated so it’s sensible to be guided by a conveyancing solicitor during the process.
Sandbanks property with a lease extension has roughly the same value as a freehold
Leasehold residencies in Sandbanks with over 100 years remaining 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 circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
Lenders will not lend on a short lease
Banks and building societies do not lend on short residential leases. You most probably encounter difficulties where you need to sell your flat in Sandbanks if the unexpired term of your lease is under the criteria set by most mortgage companies. Different lenders have varying criteria but on the whole theyrequire an unexpired term of at least seventy years.
| 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.
|
| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
|
| Halifax |
Minimum 70 years from the date of the mortgage.
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| 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.
|
What makes us experts in Sandbanks lease extensions?
Regardless of whether you are a tenant or a landlord in Sandbanks,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Sandbanks valuers.
Sandbanks Lease Extension Case Summaries:
Daniel, Sandbanks, Dorset,
Daniel was the the leasehold owner of a high value apartment in Sandbanks on the market with a lease of a little over 61 years left. Daniel on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were Daniel to exercise his statutory right. Daniel procured expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Sandbanks case:
Last Winter we were e-mailed by Mr Michael Lefebvre , who
bought a recently refurbished apartment in Sandbanks in April 2003. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative premises in Sandbanks with a long lease were in the region of £265,000. The mid-range ground rent payable was £50 collected monthly. The lease lapsed in 2099. Given that there were 73 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
Sandbanks case:
Mr D Davis moved into a studio apartment in Sandbanks in November 2010. The question was if we could approximate the price would be to prolong the lease by 90 years. Similar homes in Sandbanks with 100 year plus lease were worth £264,000. The average ground rent payable was £60 collected yearly. The lease finished in 2079. Considering the 53 years outstanding we approximated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 not including fees.