Shaftesbury leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result 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 ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Shaftesbury you should check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Shaftesbury can be a difficult process. We recommend you secure professional help from a conveyancer and surveyor 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.
Alex was the the leasehold proprietor of a conversion flat in Shaftesbury being marketed with a lease of a little over sixty years remaining. Alex on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Alex to invoke his statutory right. Alex procured expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
Dr R Cook bought a purpose-built flat in Shaftesbury in August 2009. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparable homes in Shaftesbury with an extended lease were worth £184,000. The average amount of ground rent was £55 billed per annum. The lease ended in 2078. Considering the 53 years left we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.
Last Winter we were approach by Dr Aimee Bernard , who owned a one bedroom flat in Shaftesbury in May 1998. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Identical residencies in Shaftesbury with 100 year plus lease were valued about £290,000. The average amount of ground rent was £45 collected monthly. The lease finished in 2098. Having 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus costs.