When it comes to residential leasehold premises in Sunbury, you are actually purchasing an entitlement to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly when there are less than 80 years left. Anyone in Sunbury 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 below eighty years left, under the relevant Act the freeholder can calculate and levy a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 conveyancers that we work with undertake Sunbury 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.
Last October Oliver, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Sunbury. In buying his flat two decades ago, the lease term was of no relevance. Thankfully, he realised he needed to take action soon on Extending the lease. Oliver extended the lease just in the nick of time in January. Oliver and the freeholder via the management company eventually settled on a premium of £5,000 . If the lease had dipped below eighty years, the sum would have increased by at least £1,075.
In 2014 we were contacted by Mr and Mrs. V González who, having moved into a one bedroom apartment in Sunbury in April 2006. We are asked if we could approximate the premium would be to extend the lease by an additional years. Similar flats in Sunbury with an extended lease were valued around £250,000. The mid-range amount of ground rent was £50 collected quarterly. The lease lapsed in 2094. Having 68 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 exclusive of fees.
An example of a Lease Extension case for a Sunbury premises is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case affected 1 flat. The unexpired term was 82.93 years.