Unfortunately that a Sandhurst residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Sandhurst property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining falls below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Sandhurst will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Sandhurst leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Aarav was the the leasehold owner of a 2 bedroom apartment in Sandhurst on the market with a lease of a few days over 61 years outstanding. Aarav informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and sell the flat.
In 2010 we were phoned by Dr J Moore who, having moved into a ground floor apartment in Sandhurst in November 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by an additional years. Identical homes in Sandhurst with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 billed yearly. The lease ended on 2 August 2101. Given that there were 76 years unexpired we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.
Ms Natalie Collins took over the lease of a garden flat in Sandhurst in January 2006. The dilemma was if we could approximate the price would be to extend the lease by an additional years. Comparable flats in Sandhurst with an extended lease were worth £257,800. The average ground rent payable was £65 collected per annum. The lease came to a finish on 1 May 2090. Having 65 years as a residual term we approximated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.