Unfortunately that a Shotton 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 first few years due to the loss of value being disguised by increases in the Shotton property prices.Once your lease nears 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 falls below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Shotton will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold properties in Shotton with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Shotton leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Alfie, came very near to the 80-year mark with the lease on his one bedroom apartment in Shotton. Having bought his property 18 years previously, the lease term was of little significance. As luck would have it, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Alfie arranged for a lease extension at the eleventh hour in January. Alfie and the freeholder via the management company subsequently agreed on a premium of £5,000 . If the lease had slid lower than 80 years, the premium would have become more exhorbitant by at least £1,025.
Ms Amelia Walker took over the lease of a purpose-built flat in Shotton in March 2012. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Comparative homes in Shotton with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 invoiced annually. The lease terminated in 2086. Taking into account 60 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £25,700 and £29,600 not including expenses.
Last Autumn we were called by Dr K Alexander , who bought a first floor apartment in Shotton in January 2001. The question was if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Identical residencies in Shotton with an extended lease were worth £210,000. The average amount of ground rent was £50 billed annually. The lease expiry date was in 2106. Having 80 years remaining we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of costs.