The market value of a leasehold property in Shaftesbury is impacted by how many years the lease has remaining. If it is near to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that all matters can be finalised well before the eighty year mark. Current legislation entitles Shaftesbury qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason 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 considered that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Shaftesbury can be a difficult process. We recommend you secure professional help from a conveyancing solicitor 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 a wealth of experience 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.
In 2014 Seth, came seriously near to the eighty-year mark with the lease on his purpose- built flat in Shaftesbury. Having purchased his home 18 years ago, the unexpired term was of little concern. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Seth extended the lease at the eleventh hour in July. Seth and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If the lease had slipped below 80 years, the amount would have increased by at least £975.
Last year we were e-mailed by Mr and Mrs. H Miller , who bought a one bedroom apartment in Shaftesbury in July 2011. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable flats in Shaftesbury with 100 year plus lease were in the region of £210,000. The mid-range amount of ground rent was £50 billed per annum. The lease finished in 2106. Taking into account 80 years remaining we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.
Dr Toby Rogers moved into a garden flat in Shaftesbury in August 1996. The question was if we could approximate the premium would be to extend the lease by an additional years. Similar flats in Shaftesbury with an extended lease were valued about £275,000. The average ground rent payable was £45 invoiced per annum. The lease elapsed on 9 August 2095. Taking into account 69 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of fees.