When it comes to residential leasehold premises in Sandgate, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably when there are less than 80 years left. Residents in Sandgate with a lease drawing near to 81 years left should seriously consider extending it sooner rather than later. Once the lease term has under 80 years left, under the relevant statute the freeholder can calculate and charge a larger amount, based on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
Retaining our service will provide you enhanced control over the value of your Sandgate leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Archie, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Sandgate. Having bought his home two decades ago, the unexpired term was of little significance. Luckily, he noticed he needed to take steps soon on a lease extension. Archie was able to extend his lease just in the nick of time last May. Archie and the freeholder subsequently agreed on the final figure of £5,500 . If he had missed the deadline, the sum would have escalated by a minimum £850.
Dr J Roberts completed a purpose-built apartment in Sandgate in November 1997. We are asked if we could approximate the price could be to extend the lease by a further 90 years. Comparable properties in Sandgate with 100 year plus lease were valued about £246,800. The average ground rent payable was £60 invoiced every twelve months. The lease end date was on 21 July 2075. Given that there were 50 years outstanding we calculated the premium to the landlord to extend the lease to be between £44,700 and £51,600 exclusive of expenses.
Mr and Mrs. H Jones bought a one bedroom apartment in Sandgate in May 2000. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable properties in Sandgate with an extended lease were in the region of £208,200. The mid-range amount of ground rent was £65 billed yearly. The lease ended on 21 October 2086. Taking into account 61 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 plus legals.