It’s an underpublicised truth that a Sevenoaks residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Sevenoaks property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Sevenoaks will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold properties in Sevenoaks with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Sevenoaks can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Sevenoaks lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Twenty four months ago Alexander, started to get near to the eighty-year threshold with the lease on his first floor flat in Sevenoaks. Having purchased his home two decades ago, the length of the lease was of minimal importance. by good luck, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Alexander was able to extend his lease just under the wire last June. Alexander and the landlord subsequently agreed on a premium of £6,000 . If the lease had slid below 80 years, the amount would have become more costly by at least £1,000.
In 2010 we were called by Mr and Mrs. V Smith who, having bought a basement flat in Sevenoaks in February 2003. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative homes in Sevenoaks with an extended lease were worth £168,800. The average ground rent payable was £60 billed per annum. The lease end date was on 10 September 2080. Considering the 55 years outstanding we calculated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including costs.
In 2014 we were contacted by Mr Max Nelson who, having owned a newly refurbished apartment in Sevenoaks in August 2003. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Identical homes in Sevenoaks with a long lease were in the region of £235,200. The average amount of ground rent was £45 collected quarterly. The lease ran out in 2091. Taking into account 66 years unexpired we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including costs.