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Main reasons to commence your Shaftesbury lease extension

Why you should commence your Shaftesbury lease extension today:

A Shaftesbury lease depreciates with the years remaining on the lease.

Chances are that if you own a flat in Shaftesbury you actually own a long leasehold interest over your property

An extended lease is almost the same value as a freehold

Leasehold properties in Shaftesbury with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.

Mortgage lenders will not finance a property on a short lease

Almost all mortgage companies require a lengthy amount of time remaining on any leasehold residence before they will contemplate it as adequate security. Regardless of whether you require a mortgage, you should bear in mind that it is likely that someone wanting to acquire your property in the future might well do, so if they are not able to secure a mortgage, then the financial worth of your property will likely suffer. In the last decade many banks and building societies have increased the required minimum lease length that they are prepared to grant a mortgage on

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 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;
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.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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 Shaftesbury lease extension solicitors or enfranchisement solicitors

The conveyancing solicitors that we work with procure Shaftesbury 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 lawyer we work with provide it.

Shaftesbury Lease Extension Example Cases:

Harry, Shaftesbury, Dorset

Two years ago Harry, started to get close to the 80-year mark with the lease on his purpose- built apartment in Shaftesbury. Having bought his home 19 years ago, the length of the lease was of little relevance. Thankfully, he became aware that he would imminently be paying an escalated premium for a lease extension. Harry extended the lease just ahead of time last June. Harry and the freeholder in the end agreed on sum of £5,500 . If the lease had slipped lower than 80 years, the figure would have gone up by at least £900.

Shaftesbury case:

Mr and Mrs. S Lefebvre moved into a one bedroom apartment in Shaftesbury in February 1996. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable properties in Shaftesbury with 100 year plus lease were in the region of £260,200. The average ground rent payable was £65 collected quarterly. The lease expired on 18 March 2091. Taking into account 66 years remaining we estimated the compensation to the freeholder to extend the lease to be within £16,200 and £18,600 plus professional charges.

Shaftesbury case:

Last year we were contacted by Mr and Mrs. F Phillips , who was assigned a lease of a basement apartment in Shaftesbury in January 2003. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical flats in Shaftesbury with an extended lease were worth £198,800. The average amount of ground rent was £55 billed monthly. The lease concluded in 2080. Given that there were 55 years left we approximated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 exclusive of legals.