It’s a harsh truth that a Sandiacre residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Sandiacre property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining slips below 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Sandiacre will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your Sandiacre leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Gabriel owned a studio flat in Sandiacre being marketed with a lease of just over fifty eight years remaining. Gabriel on an informal basis spoke with his freeholder being a well known local-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 subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to exercise his statutory right. Gabriel procured expert advice and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
Last Summer we were phoned by Mr and Mrs. J Evans , who acquired a studio apartment in Sandiacre in February 2001. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Similar residencies in Sandiacre with a long lease were valued about £184,000. The average amount of ground rent was £55 invoiced quarterly. The lease ran out on 11 June 2078. Taking into account 53 years outstanding we calculated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including legals.
In 2013 we were phoned by Dr Stephanie James who, having was assigned a lease of a purpose-built apartment in Sandiacre in June 2007. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Similar homes in Sandiacre with 100 year plus lease were valued around £290,000. The average amount of ground rent was £45 collected quarterly. The lease lapsed in 2098. Considering the 73 years unexpired we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.