With a long leasehold premises in Sutton, you are actually buying a right to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably once there are fewer than eighty years left. Anyone in Sutton with a lease drawing near to 81 years remaining should seriously consider extending it without delay. Once the lease term has under 80 years remaining, under the current legislation the landlord can calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Sutton with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with handle 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 lawyer we work with provide it.
Andrew was the the leasehold owner of a conversion flat in Sutton on the market with a lease of just over sixty years unexpired. Andrew on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert legal guidance and secured satisfactory resolution without going to tribunal and sell the flat.
Dr S Murphy was assigned a lease of a first floor apartment in Sutton in October 2010. We are asked if we could estimate the price could be to extend the lease by 90 years. Comparative properties in Sutton with a long lease were valued about £260,000. The average amount of ground rent was £50 invoiced quarterly. The lease end date was on 15 October 2098. Taking into account 72 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Sutton residence is Buchanan Court 39 Vernon Road in April 2010. the Tribunal assessed that the premium payable for the freehold of the block should be £44,000. This case affected 2 flats. The unexpired term as at the valuation date was 66.67 years.