Shaftesbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Shaftesbury tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Shaftesbury you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Shaftesbury with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 secure guidance from a conveyancer and valuer with experience in this area.
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 dealing with 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 recent months Daniel, came dangerously close to the eighty-year threshold with the lease on his first floor apartment in Shaftesbury. In buying his flat 18 years previously, the lease term was of no importance. As luck would have it, he recognised he needed to take action soon on Extending the lease. Daniel extended the lease at the eleventh hour last July. Daniel and the freeholder in the end agreed on a premium of £5,500 . If he not met the deadline, the premium would have increased by a minimum £900.
Last Christmas we were contacted by Mrs D Scott , who purchased a basement apartment in Shaftesbury in January 2001. We are asked if we could approximate the price would be for a ninety year lease extension. Identical premises in Shaftesbury with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 collected annually. The lease lapsed on 11 June 2098. Given that there were 73 years remaining we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.
In 2011 we were e-mailed by Dr J Morris who, having took over the lease of a one bedroom apartment in Shaftesbury in August 2007. The dilemma was if we could approximate the price would likely be to extend the lease by 90 years. Comparable homes in Shaftesbury with a long lease were in the region of £235,600. The average ground rent payable was £60 invoiced monthly. The lease came to a finish in 2087. Considering the 62 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 plus fees.