It’s an underpublicised certainty that a Sanderstead residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Sanderstead property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term dips under eighty years, you will end up paying half 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 The majority of leasehold owners in Sanderstead will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
It is generally considered that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The lawyers that we work with procure Sanderstead 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.
In the wake of 6 months of lengthy discussions with the landlord of her garden apartment in Sanderstead, Megan started the lease extension process as the eighty year mark was swiftly approaching. The lease extension was finalised in April 2011. The freeholder’s fees were restricted to less than 650 GBP.
In 2014 we were approached by Mr and Mrs. E Bailey who, having moved into a purpose-built flat in Sanderstead in October 1997. The question was if we could estimate the premium would likely be for a 90 year lease extension. Comparative flats in Sanderstead with 100 year plus lease were in the region of £250,400. The average ground rent payable was £65 collected monthly. The lease ran out on 14 April 2089. Having 64 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 exclusive of professional charges.
An example of a Freehold Enfranchisement decision 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 related to 6 flats. The unexpired residue of the current lease was 78.32 years.