Unfortunately that a Sacriston 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 early years due to the loss of value being disguised by increases in the Sacriston property market.Once your lease nears 85ish years, you should start considering a lease extension. If lease term dips under eighty 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. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Sacriston will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| 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 gives you increased control over the value of your Sacriston leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Blake, came very close to the 80-year threshold with the lease on his basement apartment in Sacriston. In buying his property two decades ago, the lease term was of minimal significance. Fortunately, he realised he would soon be paying an inflated amount for a lease extension. Blake arranged for a lease extension at the eleventh hour in January. Blake and the landlord ultimately agreed on sum of £5,500 . If he failed to meet the deadline, the figure would have increased by at least £1,025.
In 2011 we were approached by Mr and Mrs. R Bell who, having took over the lease of a one bedroom apartment in Sacriston in June 2001. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Identical flats in Sacriston with 100 year plus lease were valued about £257,800. The average amount of ground rent was £65 billed quarterly. The lease terminated in 2090. Taking into account 65 years left we estimated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 not including expenses.
Last Christmas we were approach by Mrs U Williams , who was assigned a lease of a one bedroom apartment in Sacriston in February 2004. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Identical properties in Sacriston with an extended lease were in the region of £191,400. The average ground rent payable was £55 invoiced quarterly. The lease concluded in 2079. Considering the 54 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 exclusive of expenses.