Sidcup 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 gets more expensive. It is the case that most Sidcup tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Sidcup you must investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Sidcup flat owner with a lease having around eighty years left should take action to make sure that a lease extension is effected without delay
Leasehold properties in Sidcup with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service will provide you increased control over the value of your Sidcup leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Gabriel, started to get close to the 80-year threshold with the lease on his purpose- built apartment in Sidcup. In buying his home twenty years ago, the length of the lease was of minimal relevance. Fortunately, it dawned on him that he would soon be paying an inflated amount for a lease extension. Gabriel arranged for a lease extension at the eleventh hour in August. Gabriel and the landlord ultimately agreed on sum of £5,000 . If he had missed the deadline, the premium would have increased by at least £875.
Dr Ethan Howard took over the lease of a studio flat in Sidcup in April 2001. The question was if we could estimate the premium could be for a 90 year lease extension. Comparative homes in Sidcup with an extended lease were valued about £280,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease finished in 2102. Having 78 years as a residual term we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including fees.
An example of a Lease Extension case for a Sidcup property is 103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended lease should be £34,500 according to the expert witness valuation calculation This case affected 1 flat.