For those whose Sandhurst flat is held on a long lease, the message is clear – if no remedial action is taken, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Sandhurst with in excess of 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 buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Sandhurst,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Sandhurst valuers.
Following protracted discussions with the landlord of her garden apartment in Sandhurst, Victoria started the lease extension process just as the lease was nearing the critical eighty-year threshold. The legal work completed in February 2010. The landlord’s charges were negotiated to less than 450 pounds.
In 2012 we were e-mailed by Mr R Peterson who, having was assigned a lease of a first floor apartment in Sandhurst in November 2007. The question was if we could approximate the premium could be for a 90 year extension to my lease. Identical premises in Sandhurst with 100 year plus lease were valued about £200,000. The average ground rent payable was £50 collected every twelve months. The lease end date was in 2103. Considering the 78 years left we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus costs.
In 2009 we were called by Mrs Phoebe Nguyen who, having bought a one bedroom flat in Sandhurst in July 2001. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative premises in Sandhurst with a long lease were in the region of £267,600. The average ground rent payable was £65 invoiced every twelve months. The lease came to a finish in 2092. Taking into account 67 years remaining we calculated the compensation to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of expenses.