Unfortunately that a Sandgate residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Sandgate property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining drops below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Sandgate will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Sandgate 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.
Twenty four months ago Aiden, came seriously near to the eighty-year threshold with the lease on his leasehold flat in Sandgate. Having bought his property 19 years ago, the unexpired term was of little relevance. As luck would have it, he recognised he needed to take steps soon on Extending the lease. Aiden was able to extend his lease just under the wire last April. Aiden and the landlord in the end agreed on an amount of £5,000 . If the lease had dipped to less than 80 years, the figure would have become more costly by at least £925.
In 2009 we were e-mailed by Ms Freya Martínez who, having took over the lease of a basement apartment in Sandgate in January 1995. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical flats in Sandgate with an extended lease were in the region of £250,000. The mid-range amount of ground rent was £50 billed annually. The lease elapsed on 19 February 2094. Having 69 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.
Last Winter we were contacted by Ms N Davis , who bought a one bedroom apartment in Sandgate in March 2002. We are asked if we could estimate the premium could be to extend the lease by 90 years. Comparative premises in Sandgate with a long lease were valued about £290,000. The mid-range amount of ground rent was £60 invoiced per annum. The lease terminated on 25 November 2105. Considering the 80 years left we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.