On the balance of probabilities if you own a flat in Sandy you actually own a long leasehold interest over your property
Leasehold premises in Sandy with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Sandy 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 conveyancer we work with provide it.
After unsuccessful discussions with the freeholder of her first floor apartment in Sandy, Millie commenced the lease extension process as the 80 year mark was quickly approaching. The lease extension was finalised in April 2015. The freeholder’s costs were kept to an absolute minimum.
In 2014 we were phoned by Mr Ali Ramírez who, having purchased a studio apartment in Sandy in April 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by 90 years. Comparative residencies in Sandy with 100 year plus lease were in the region of £235,200. The average ground rent payable was £45 collected per annum. The lease elapsed in 2091. Having 66 years remaining we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus fees.
Last Christmas we were called by Mr S Smith , who moved into a purpose-built flat in Sandy in August 2003. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparative residencies in Sandy with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 collected monthly. The lease ran out on 15 November 2102. Given that there were 77 years left we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.