The re-sale value of a leasehold property in Sandbanks depends on how many years the lease has remaining. If it is close to or less than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that all matters can be addressed ahead of the 80 year cut off point. Current legislation enables Sandbanks qualifying lessees to an additional term of 90 years in addition to the unexpired term, at a nominal rent (no ground rent). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
Lender | Requirement |
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Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
National Westminster Bank | Mortgage term plus 30 years. |
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 |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you increased control over the value of your Sandbanks leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Theo owned a conversion flat in Sandbanks being sold with a lease of a little over 72 years left. Theo informally approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Theo to invoke his statutory right. Theo procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
Mr and Mrs. O Anderson was assigned a lease of a newly refurbished flat in Sandbanks in September 2004. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Comparative properties in Sandbanks with an extended lease were worth £220,400. The mid-range ground rent payable was £45 invoiced quarterly. The lease expired on 4 August 2088. Given that there were 64 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £15,200 and £17,600 plus fees.
Last Summer we were phoned by Mrs Rosie Laurent , who was assigned a lease of a first floor flat in Sandbanks in January 2010. We are asked if we could approximate the price would be for a ninety year extension to my lease. Comparative homes in Sandbanks with 100 year plus lease were valued around £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease expired in 2099. Having 75 years as a residual term we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.