As the the remaining lease term of a Sutton residential lease decreases so does its value and therefore the value of your property. If the residual term has, over one hundred years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary reason why you should extend the lease sooner than later. The majority of flat owners in Sutton will meet the qualifying criteria; that being said a lawyer can advise if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Sutton with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
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. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 procure 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.
Two years ago Luke, started to get close to the eighty-year threshold with the lease on his purpose- built flat in Sutton. Having bought his flat 19 years ago, the length of the lease was of no interest. by good luck, it dawned on him that he needed to take action soon on a lease extension. Luke was able to extend his lease just under the wire in May. Luke and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If he failed to meet the deadline, the price would have escalated by a minimum £875.
Last Spring we were e-mailed by Dr M Ricardo , who owned a garden flat in Sutton in September 1996. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar flats in Sutton with an extended lease were worth £173,800. The mid-range amount of ground rent was £65 invoiced annually. The lease ran out on 16 February 2079. Considering the 55 years outstanding we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Sutton flat 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 was in relation to 2 flats. The unexpired residue of the current lease was 66.67 years.