Sutton leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Sutton tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Sutton you must check if your lease has between 70 and ninety years remaining. There are compelling reasons why a Sutton leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The lawyers 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.
During the course of the last few months Oliver, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Sutton. In buying his property 19 years previously, the lease term was of minimal interest. by good luck, it dawned on him that he needed to take steps soon on a lease extension. Oliver arranged for a lease extension just in the nick of time in September. Oliver and the landlord who owned the flat above in the end settled on a premium of £6,000 . If he not met the deadline, the price would have become more exhorbitant by a minimum £975.
Last Christmas we were contacted by Ms Zoe Phillips , who was assigned a lease of a studio apartment in Sutton in February 2009. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical flats in Sutton with an extended lease were worth £173,800. The mid-range ground rent payable was £60 billed per annum. The lease came to a finish in 2080. Having 55 years remaining we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of fees.
An example of a Freehold Enfranchisement case for a Sutton property 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 related to 2 flats. The unexpired term as at the valuation date was 66.67 years.