Sunderland leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Sunderland enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Sunderland you really ought to investigate if your lease has between seventy and 90 years left. There are good reasons why a Sunderland flat owner with a lease having around eighty years remaining should take action to ensure that a lease extension is effected without delay
Leasehold properties in Sunderland with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
The lawyers that we work with undertake Sunderland 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.
Luke owned a high value flat in Sunderland being marketed with a lease of a little over sixty years left. Luke on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2014 we were contacted by Mr and Mrs. F Morgan who, having bought a one bedroom flat in Sunderland in August 1995. The question was if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Similar homes in Sunderland with 100 year plus lease were worth £233,200. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease end date was on 24 April 2086. Considering the 61 years remaining we approximated the compensation to the landlord to extend the lease to be within £22,800 and £26,400 plus professional charges.
In 2013 we were e-mailed by Mr and Mrs. J Harris who, having moved into a basement flat in Sunderland in August 2010. The dilemma was if we could shed any light on how much (approximately) premium would be to prolong the lease by an additional years. Identical homes in Sunderland with an extended lease were worth £166,800. The average ground rent payable was £55 invoiced per annum. The lease finished on 21 July 2075. Having 50 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.