With a long leasehold premises in Sanderstead, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably once there are less than eighty years remaining. Leasehold owners in Sanderstead with a lease approaching 81 years left should seriously think of extending it as soon as possible. Once the lease term has under 80 years outstanding, under the relevant statute the freeholder is entitled to calculate and demand a larger amount, based on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Sanderstead with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your Sanderstead leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Summer Harry, started to get near to the eighty-year mark with the lease on his studio apartment in Sanderstead. Having purchased his home twenty years ago, the unexpired term was of minimal concern. Fortunately, he became aware that he would soon be paying an inflated amount for a lease extension. Harry arranged for a lease extension at the eleventh hour in April. Harry and the freeholder eventually settled on a premium of £5,000 . If he not met the deadline, the figure would have become more costly by at least £925.
Last month we were phoned by Dr J Murphy , who acquired a one bedroom apartment in Sanderstead in September 2000. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Similar flats in Sanderstead with a long lease were valued about £285,000. The mid-range ground rent payable was £45 invoiced annually. The lease expired in 2097. Considering the 72 years outstanding we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus expenses.
An example of a Freehold Enfranchisement case for a Sanderstead premises is The Woodlands 95 Purley Park Road in April 2009. The Tribunals own valuation produced the figure of £37,912. This case was in relation to 6 flats. The number of years remaining on the existing lease(s) was 78.32 years.