Unfortunately that a Sonning Common residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Sonning Common property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining dips below 80 years, you will end up paying half 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 additional value that a lease extension will add the property Most leasehold owners in Sonning Common will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold residencies in Sonning Common with more than 100 years left on the lease are sometimes referred to as ‘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 reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Sonning Common 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.
In recent months Ryan, came very near to the 80-year threshold with the lease on his leasehold flat in Sonning Common. In buying his flat two decades ago, the length of the lease was of minimal importance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Ryan was able to extend his lease at the eleventh hour in March. Ryan and the landlord in the end settled on a premium of £5,500 . If the lease had descended to less than 80 years, the price would have increased by at least £1,025.
In 2011 we were approached by Mr and Mrs. N Bailey who, having bought a one bedroom apartment in Sonning Common in April 2005. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Comparative homes in Sonning Common with 100 year plus lease were valued about £191,400. The average ground rent payable was £55 collected quarterly. The lease end date was on 1 July 2079. Taking into account 54 years unexpired we calculated the compensation to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of professional charges.
Last Summer we were e-mailed by Dr Lewis Scott , who moved into a ground floor flat in Sonning Common in January 2004. The question was if we could estimate the price could be for a ninety year lease extension. Comparable homes in Sonning Common with a long lease were in the region of £295,000. The average ground rent payable was £45 collected monthly. The lease end date was on 2 February 2099. Considering the 74 years remaining we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.