It’s a harsh certainty that a Shefford residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Shefford property prices.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Shefford will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Shefford,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shefford valuers.
Half a year ago Jackson, came seriously close to the 80-year threshold with the lease on his basement apartment in Shefford. In buying his flat two decades ago, the length of the lease was of minimal significance. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Jackson was able to extend his lease at the eleventh hour in July. Jackson and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If he not met the deadline, the figure would have escalated by a minimum £875.
In 2013 we were phoned by Mr J Walker who, having owned a purpose-built apartment in Shefford in October 2001. The question was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparable flats in Shefford with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £65 invoiced per annum. The lease lapsed in 2093. Given that there were 68 years left we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus costs.
In 2009 we were phoned by Dr Niamh Robinson who, having owned a garden flat in Shefford in November 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Similar premises in Shefford with an extended lease were valued around £208,600. The mid-range ground rent payable was £60 collected quarterly. The lease ended in 2082. Having 57 years left we estimated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 plus professional charges.