Sutton leases on residential properties are gradually decreasing in 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. It is the case that most Sutton tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Sutton you would be well advised to investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is generally considered that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 gives you better control over the value of your Sutton leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Mason, started to get close to the 80-year mark with the lease on his ground floor apartment in Sutton. Having purchased his flat 19 years previously, the lease term was of minimal significance. by good luck, he became aware that he needed to take steps soon on a lease extension. Mason was able to extend his lease just in the nick of time in May. Mason and the freeholder via the managing agents eventually settled on sum of £5,500 . If he failed to meet the deadline, the amount would have increased by at least £900.
In 2009 we were approached by Mr and Mrs. R Khan who, having purchased a recently refurbished flat in Sutton in March 2007. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Similar residencies in Sutton with a long lease were valued around £193,400. The mid-range ground rent payable was £65 invoiced per annum. The lease finished on 19 June 2084. Taking into account 59 years unexpired we calculated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 not including legals.
An example of a Freehold Enfranchisement case for a Sutton residence is Buchanan Court 39 Vernon Road in April 2010. the Tribunal assessed that the premium payable for the freehold of the block should be £44,000. This case related to 2 flats. The unexpired residue of the current lease was 66.67 years.