The re-sale value of a leasehold property in Shinfield depends on how long the lease has remaining. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be concluded prior to the eighty year threshold. Leasehold Reform legislation entitles Shinfield qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of ninety years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Shinfield leasehold, as your property will be more valuable and saleable 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.
Tommy owned a 2 bedroom flat in Shinfield on the market with a lease of fraction over 72 years remaining. Tommy on an informal basis contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Tommy to exercise his statutory right. Tommy obtained expert legal guidance and secured satisfactory resolution informally and sell the property.
Last Summer we were approach by Mr and Mrs. G Baker , who bought a one bedroom apartment in Shinfield in July 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Similar premises in Shinfield with a long lease were in the region of £285,000. The mid-range ground rent payable was £55 invoiced monthly. The lease concluded in 2104. Considering the 79 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of fees.
Last year we were e-mailed by Dr C Turner , who bought a garden flat in Shinfield in August 1999. The question was if we could estimate the price would be for a ninety year lease extension. Similar homes in Shinfield with an extended lease were valued around £193,400. The average amount of ground rent was £65 invoiced per annum. The lease termination date was in 2084. Given that there were 59 years left we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 not including costs.