Unfortunately that a Shillington residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Shillington property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Shillington will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
The conveyancers that we work with undertake Shillington 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 conveyancer we work with provide it.
Sam was the the leasehold proprietor of a high value apartment in Shillington on the market with a lease of just over fifty eight years outstanding. Sam on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. 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 £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Sam to invoke his statutory right. Sam obtained expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
In 2010 we were phoned by Mr H Lefebvre who, having purchased a ground floor flat in Shillington in August 2005. The question was if we could estimate the premium could be for a 90 year extension to my lease. Identical residencies in Shillington with an extended lease were valued around £240,600. The average ground rent payable was £60 invoiced annually. The lease expired in 2086. Considering the 62 years unexpired we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 not including expenses.
In 2010 we were called by Mr and Mrs. D Ward who, having was assigned a lease of a newly refurbished flat in Shillington in May 1995. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Similar flats in Shillington with 100 year plus lease were in the region of £174,200. The average ground rent payable was £55 billed per annum. The lease ran out in 2075. Having 51 years outstanding we estimated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 plus professional charges.