Shaftesbury residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
Leasehold premises in Shaftesbury with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Shaftesbury can be a difficult process. We recommend you obtain guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Shaftesbury lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Harrison, came precariously close to the eighty-year mark with the lease on his one bedroom flat in Shaftesbury. In buying his flat 18 years ago, the length of the lease was of little significance. Thankfully, he became aware that he needed to take action soon on a lease extension. Harrison arranged for a lease extension just in the nick of time last September. Harrison and the freeholder subsequently agreed on an amount of £5,000 . If the lease had dropped to less than eighty years, the amount would have become more exhorbitant by at least £900.
Mr and Mrs. J Parker completed a garden apartment in Shaftesbury in April 2002. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Similar homes in Shaftesbury with 100 year plus lease were in the region of £201,200. The mid-range amount of ground rent was £55 billed per annum. The lease ended in 2082. Considering the 56 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of expenses.
In 2012 we were e-mailed by Ms Erin Leroy who, having moved into a newly refurbished apartment in Shaftesbury in March 2000. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Comparable homes in Shaftesbury with 100 year plus lease were valued around £300,000. The average amount of ground rent was £50 invoiced per annum. The lease finished on 3 May 2102. Having 76 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.