Unfortunately that a Sutton On Sea residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Sutton On Sea property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% 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 extra value that a lease extension will add the property Most leasehold owners in Sutton On Sea will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold properties in Sutton On Sea with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Sutton On Sea 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.
Last Christmas Hugo, started to get near to the 80-year threshold with the lease on his garden flat in Sutton On Sea. Having purchased his home 19 years previously, the lease term was of little concern. Fortunately, he noticed he needed to take action soon on a lease extension. Hugo was able to extend his lease at the eleventh hour last April. Hugo and the landlord who owned the flat above in the end agreed on a premium of £6,000 . If the lease had slipped lower than eighty years, the sum would have become more costly by a minimum £975.
Mr W Dupont acquired a studio flat in Sutton On Sea in November 2006. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Identical flats in Sutton On Sea with an extended lease were worth £300,000. The average ground rent payable was £50 collected quarterly. The lease elapsed on 15 February 2101. Having 76 years as a residual term we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of expenses.
In 2009 we were phoned by Mr and Mrs. B Norbert who, having owned a studio flat in Sutton On Sea in April 1997. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Comparable homes in Sutton On Sea with a long lease were worth £257,800. The average ground rent payable was £65 billed every twelve months. The lease came to a finish in 2090. Taking into account 65 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 not including fees.