Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Sunderland. Clearly, the term of lease left shortens as time goes by. This is often overlooked and only becomes a problem when the residence needs to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying leaseholders in Sunderland have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give due deliberation before putting off your Sunderland lease extension. Holding off the cost now only increases the price you will ultimately have to pay for a lease extension
Leasehold properties in Sunderland with over 100 years outstanding 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Sunderland leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Evan was the the leasehold owner of a conversion apartment in Sunderland being sold with a lease of fraction over sixty years outstanding. Evan informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Evan to invoke his statutory right. Evan obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Last Winter we were called by Mr and Mrs. L Rodríguez , who moved into a one bedroom apartment in Sunderland in June 1999. The question was if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Identical residencies in Sunderland with a long lease were worth £206,200. The average amount of ground rent was £55 billed yearly. The lease ran out on 14 April 2082. Given that there were 56 years remaining we approximated the premium to the landlord to extend the lease to be within £31,400 and £36,200 plus legals.
In 2009 we were e-mailed by Ms W Stewart who, having was assigned a lease of a one bedroom flat in Sunderland in January 2001. The dilemma was if we could estimate the price would be to prolong the lease by an additional years. Identical residencies in Sunderland with 100 year plus lease were valued about £300,000. The average amount of ground rent was £50 invoiced every twelve months. The lease ended in 2102. Having 76 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.