For those whose Great Sankey home is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
The conveyancing solicitors that we work with handle Great Sankey 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.
After protracted discussions with the freeholder of her ground floor flat in Great Sankey, Sian initiated the lease extension process just as the lease was nearing the all-important 80-year threshold. The lease extension was finalised in August 2010. The freeholder’s charges were kept to an absolute minimum.
Last Christmas we were called by Ms T Leroy , who was assigned a lease of a recently refurbished apartment in Great Sankey in August 1995. The question was if we could approximate the price could be for a 90 year lease extension. Comparable flats in Great Sankey with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 invoiced monthly. The lease terminated on 18 November 2097. Given that there were 71 years left we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.
Last Spring we were e-mailed by Dr C Fournier , who completed a purpose-built apartment in Great Sankey in September 2002. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparative residencies in Great Sankey with a long lease were valued around £230,800. The average amount of ground rent was £60 invoiced every twelve months. The lease expired on 24 June 2086. Considering the 60 years left we calculated the premium to the freeholder to extend the lease to be within £24,700 and £28,600 exclusive of costs.