The market value of Sutton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the unexpired lease term is less than eighty years
Leasehold properties in Sutton with in excess of one hundred years outstanding on the lease are often referred to as ‘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 merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
Engaging our service gives you increased control over the value of your Sutton leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Leon was the the leasehold owner of a 2 bedroom apartment in Sutton on the market with a lease of fraction over sixty years unexpired. Leon on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Leon to exercise his statutory right. Leon procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Christmas we were called by Ms Olivia Murphy , who moved into a studio flat in Sutton in October 2005. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable residencies in Sutton with an extended lease were worth £254,200. The average ground rent payable was £60 invoiced per annum. The lease expired on 15 April 2077. Having 51 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £43,700 and £50,600 not including professional charges.
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 residue of the current lease was 66.67 years.