Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Sandown. Inevitably, the term of lease left shortens over time. This is often ignored and only raises itself as an issue when the flat or house needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Qualifying long lease owners in Sandown have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. Do give due deliberation before putting off your Sandown lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a residential leasehold 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 unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Using our service gives you increased control over the value of your Sandown leasehold, as your property will be more valuable and marketable in terms of 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.
14 months ago David, started to get close to the eighty-year mark with the lease on his first floor apartment in Sandown. Having bought his property two decades ago, the unexpired term was of no bearing. Thankfully, he realised he would soon be paying an escalated premium for a lease extension. David arranged for a lease extension just ahead of time last August. David and the landlord in the end agreed on an amount of £6,000 . If the lease had slid to less than eighty years, the price would have escalated by at least £975.
Mr and Mrs. F Morel bought a one bedroom flat in Sandown in January 2012. The question was if we could estimate the premium would be to prolong the lease by 90 years. Similar flats in Sandown with an extended lease were valued about £285,000. The mid-range ground rent payable was £45 collected annually. The lease concluded on 7 October 2098. Considering the 72 years remaining we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of expenses.
In 2013 we were called by Mr and Mrs. U Thomas who, having purchased a recently refurbished apartment in Sandown in July 2002. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar flats in Sandown with an extended lease were valued around £233,200. The mid-range ground rent payable was £60 collected every twelve months. The lease elapsed in 2087. Having 61 years as a residual term we approximated the premium to the landlord for the lease extension to be between £22,800 and £26,400 exclusive of legals.