It’s a harsh truth that a Shirehampton residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Shirehampton property market.Once your lease gets to 85ish years, you should start thinking about 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 slips below 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Shirehampton will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 handle Shirehampton 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 conveyancing solicitor we work with provide it.
Half a year ago Callum, started to get close to the 80-year mark with the lease on his ground floor flat in Shirehampton. In buying his home two decades ago, the unexpired term was of no relevance. by good luck, he noticed he needed to take steps soon on Extending the lease. Callum extended the lease just ahead of time in August. Callum and the landlord subsequently settled on a premium of £5,500 . If the lease had gone lower than eighty years, the premium would have gone up by a minimum £1,050.
Dr Imogen Morris bought a one bedroom apartment in Shirehampton in March 2010. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Identical premises in Shirehampton with a long lease were valued around £208,200. The mid-range amount of ground rent was £65 invoiced annually. The lease termination date was in 2087. Given that there were 61 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 exclusive of expenses.
In 2011 we were approached by Mr A Peterson who, having completed a newly refurbished apartment in Shirehampton in January 2006. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical flats in Shirehampton with a long lease were in the region of £260,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease elapsed on 24 October 2098. Having 72 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.