Unfortunately that a Banstead residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Banstead property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Banstead will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you enhanced control over the value of your Banstead leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Zachary, came dangerously close to the 80-year threshold with the lease on his purpose- built apartment in Banstead. Having purchased his flat two decades ago, the unexpired term was of no relevance. Fortunately, he realised he needed to take steps soon on a lease extension. Zachary was able to extend his lease just ahead of time in May. Zachary and the freeholder via the management company eventually agreed on sum of £6,000 . If he failed to meet the deadline, the premium would have become more costly by at least £1,000.
Last month we were called by Mr Seth Simon , who bought a newly refurbished apartment in Banstead in July 2011. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable residencies in Banstead with an extended lease were in the region of £242,600. The mid-range ground rent payable was £45 billed annually. The lease came to a finish in 2092. Considering the 67 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 not including professional charges.
An example of a Lease Extension decision for a Banstead residence is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case was in relation to 1 flat. The unexpired term was 60.43 years.