Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Shaftesbury. Clearly, the period of lease left reduces over time. This is often overlooked and only raises itself as an issue when the property needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Qualifying leaseholders in Shaftesbury have the legal entitlement to extend the lease for an additional ninety years under statute. You should give careful deliberation before delaying your Shaftesbury lease extension. Holding off the cost now only increases the price you will eventually incur for a lease extension
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Retaining our service gives you better control over the value of your Shaftesbury leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Theo owned a 2 bedroom flat in Shaftesbury on the market with a lease of a little over 72 years unexpired. Theo informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be due on a lease extension were Theo to exercise his statutory right. Theo procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Last year we were e-mailed by Dr B Watson , who took over the lease of a first floor apartment in Shaftesbury in July 2005. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparable premises in Shaftesbury with a long lease were worth £250,400. The mid-range amount of ground rent was £65 collected per annum. The lease expired in 2088. Given that there were 64 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £19,000 and £22,000 exclusive of professional charges.
Mr and Mrs. S Petit completed a ground floor apartment in Shaftesbury in July 2011. We are asked if we could approximate the premium could be to extend the lease by an additional years. Comparable flats in Shaftesbury with an extended lease were worth £189,000. The mid-range ground rent payable was £55 collected per annum. The lease expired in 2077. Given that there were 53 years outstanding we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 not including costs.