It’s an underpublicised certainty that a Tibshelf residential lease is a wasting 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 Tibshelf property prices.Where your lease has approximately ninety years left, 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 slips under eighty years - otherwise a higher amount will be payable. Most leasehold owners in Tibshelf will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your Tibshelf leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 George, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Tibshelf. In buying his property two decades ago, the lease term was of minimal bearing. Fortunately, he became aware that he needed to take steps soon on Extending the lease. George extended the lease at the eleventh hour in August. George and the freeholder via the managing agents ultimately settled on a premium of £6,000 . If the lease had dipped below eighty years, the premium would have increased by at least £1,125.
In 2013 we were e-mailed by Ms Abbie Clarke who, having bought a newly refurbished flat in Tibshelf in November 2008. The question was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar flats in Tibshelf with a long lease were valued about £300,000. The mid-range ground rent payable was £50 invoiced per annum. The lease expired in 2101. Given that there were 76 years remaining we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus professional charges.
In 2009 we were phoned by Mr T Anderson who, having purchased a one bedroom flat in Tibshelf in July 2009. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Comparable flats in Tibshelf with an extended lease were in the region of £257,800. The mid-range amount of ground rent was £65 invoiced yearly. The lease ran out on 2 January 2090. Having 65 years outstanding we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of expenses.