When it comes to long leasehold property in Sleaford, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive notably once there are fewer than 80 years remaining. Leasehold owners in Sleaford with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. Once a lease has under 80 years remaining, under the current Act the landlord is entitled to calculate and demand a greater premium, based on a technical computation, strangely termed as “marriage value” which is due.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for decades to come.
| 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 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; |
| Birmingham Midshires | 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. |
Retaining our service will provide you increased control over the value of your Sleaford leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Theo, started to get close to the 80-year mark with the lease on his two bedroom apartment in Sleaford. In buying his home 18 years previously, the length of the lease was of little concern. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Theo arranged for a lease extension just ahead of time last July. Theo and the landlord subsequently agreed on sum of £5,500 . If the lease had gone below 80 years, the premium would have increased by a minimum £975.
Last year we were phoned by Dr J Adams , who owned a one bedroom apartment in Sleaford in May 2005. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar premises in Sleaford with an extended lease were valued about £285,000. The average ground rent payable was £45 billed monthly. The lease lapsed on 11 June 2097. Taking into account 71 years left we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.
Last Autumn we were e-mailed by Dr Omar Hill , who moved into a recently refurbished apartment in Sleaford in April 1999. We are asked if we could estimate the price could be to prolong the lease by ninety years. Identical flats in Sleaford with 100 year plus lease were in the region of £225,800. The mid-range amount of ground rent was £60 collected quarterly. The lease concluded on 27 January 2086. Given that there were 60 years left we calculated the premium to the landlord to extend the lease to be within £24,700 and £28,600 exclusive of expenses.