Sandbanks 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 the lease becomes more expensive. Most owners of residential leasehold property in Sandbanks enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Sandbanks you must check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Sandbanks 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.
Eliot was the the leasehold owner of a 2 bedroom flat in Sandbanks on the market with a lease of a little over 59 years left. Eliot on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Mrs Nicole Gray completed a garden flat in Sandbanks in January 2010. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparative premises in Sandbanks with a long lease were in the region of £264,000. The average amount of ground rent was £60 collected monthly. The lease concluded on 23 October 2079. Taking into account 53 years remaining we approximated the premium to the freeholder for the lease extension to be between £37,100 and £42,800 plus costs.
In 2010 we were contacted by Mr and Mrs. V Morgan who, having bought a one bedroom apartment in Sandbanks in April 1998. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Similar flats in Sandbanks with an extended lease were worth £220,400. The average amount of ground rent was £45 invoiced per annum. The lease finished in 2090. Given that there were 64 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 not including expenses.