With a domestic leasehold property in South Sutton, you are in fact renting it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are fewer than eighty years left. Leasehold owners in South Sutton with a lease drawing near to 81 years unexpired should seriously think of extending it sooner as opposed to later. When the lease term has fewer than eighty years left, under the relevant Act the landlord can calculate and demand a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The lawyers that we work with procure South Sutton 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 conveyancing solicitor we work with provide it.
16 months ago Nathan, came precariously near to the eighty-year mark with the lease on his one bedroom flat in South Sutton. Having purchased his flat 18 years previously, the length of the lease was of no importance. As luck would have it, he realised he needed to take action soon on a lease extension. Nathan arranged for a lease extension at the eleventh hour in June. Nathan and the freeholder via the managing agents subsequently settled on a premium of £5,500 . If he not met the deadline, the sum would have become more costly by a minimum £1,050.
In 2013 we were called by Dr T Wilson who, having owned a purpose-built flat in South Sutton in May 1998. The question was if we could estimate the premium could be for a ninety year extension to my lease. Identical premises in South Sutton with an extended lease were in the region of £242,600. The average amount of ground rent was £45 collected per annum. The lease concluded on 14 September 2092. Having 67 years left we calculated the premium to the landlord for the lease extension to be between £11,400 and £13,200 plus professional charges.
Last Summer we were approach by Mr Luke Dupont , who completed a garden apartment in South Sutton in January 2009. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Comparative flats in South Sutton with a long lease were valued around £280,000. The average amount of ground rent was £55 collected monthly. The lease ended on 27 October 2103. Having 78 years outstanding we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.