On the balance of probabilities where you own a flat in Sandwich you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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; |
| Lloyds TSB Scotland | 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Sandwich 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 lawyer we work with provide it.
Trailing protracted negotiations with the freeholder of her basement apartment in Sandwich, Francesca commenced the lease extension process just as the lease was approaching the all-important eighty-year mark. The transaction was concluded in June 2008. The freeholder’s charges were kept to an absolute minimum.
Last Spring we were called by Dr Oliver Scott , who owned a recently refurbished flat in Sandwich in October 2006. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Sandwich with a long lease were in the region of £193,400. The average amount of ground rent was £65 billed annually. The lease expiry date was in 2084. Taking into account 59 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 plus legals.
In 2009 we were phoned by Mr and Mrs. E Harris who, having moved into a one bedroom flat in Sandwich in November 2000. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Similar properties in Sandwich with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected yearly. The lease concluded on 5 February 2095. Given that there were 70 years remaining we estimated the premium to the freeholder for the lease extension to be between £10,500 and £12,000 exclusive of expenses.