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Top reasons for Sandy lease extension


Main reasons to start your Sandy lease extension today:

Increase your lease and increase your Sandy property value

The re-sale value of a leasehold property in Sandy is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that formalities can be concluded well before the 80 year threshold. Statute enables Sandy qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of 90 years. The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.

Sandy property with a lease extension has roughly the same value as a freehold

It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for decades to come.

Mortgage lenders may not finance a property with a short lease

Whether or not the lease is be regarded as a short lease varies by mortgage company, yet banks and building societies start to become concerned at around 75 years. This may be problematic when you come to dispose of or remortgage your property as it will be practically unmortgageable. Even though you may not have an imminent plan to sell but when you do your buyer will have to wait two years before they can start the legal procedures for an extension to the lease.

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 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.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
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.

Get in touch with one of our Sandy lease extension solicitors or enfranchisement solicitors

The lawyers that we work with procure Sandy 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 conveyancing solicitor we work with provide it.

Sandy Lease Extension Case Summaries:

Caleb, Sandy, Bedfordshire

During the course of the last few months Caleb, started to get near to the 80-year mark with the lease on his garden flat in Sandy. In buying his flat two decades ago, the unexpired term was of no significance. Thankfully, he became aware that he needed to take action soon on Extending the lease. Caleb was able to extend his lease just ahead of time in August. Caleb and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If the lease had dropped lower than eighty years, the amount would have gone up by a minimum £925.

Sandy case:

Dr Leon Martin acquired a one bedroom flat in Sandy in August 1995. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Similar flats in Sandy with a long lease were in the region of £200,800. The mid-range ground rent payable was £65 invoiced per annum. The lease elapsed in 2085. Taking into account 60 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 plus professional charges.

Sandy case:

Mr and Mrs. N Morel owned a recently refurbished apartment in Sandy in May 2006. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparable homes in Sandy with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 collected yearly. The lease ran out on 7 March 2096. Given that there were 71 years outstanding we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.