Sandiacre leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Sandiacre tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Sandiacre you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
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 further 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Sandiacre,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Sandiacre valuers.
Last October Max, started to get near to the 80-year threshold with the lease on his garden flat in Sandiacre. Having bought his property two decades ago, the lease term was of no concern. by good luck, he noticed he needed to take steps soon on a lease extension. Max was able to extend his lease just in the nick of time last May. Max and the landlord who owned the flat above subsequently settled on the final figure of £6,000 . If the lease had gone lower than eighty years, the amount would have gone up by at least £975.
Mr T Nelson took over the lease of a one bedroom apartment in Sandiacre in May 2003. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar homes in Sandiacre with 100 year plus lease were in the region of £216,000. The average ground rent payable was £60 invoiced every twelve months. The lease concluded on 7 February 2083. Taking into account 58 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus legals.
Dr Y Rodríguez moved into a basement apartment in Sandiacre in May 2001. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Identical residencies in Sandiacre with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease elapsed in 2103. Given that there were 78 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.