The market value of Earl Shilton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than eighty years
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Earl Shilton 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 lawyer we work with provide it.
Trailing lengthy correspondence with the freeholder of her basement flat in Earl Shilton, Nicole initiated the lease extension process as the eighty year deadline was quickly nearing. The legal work was finalised in April 2007. The landlord’s costs were kept to an absolute minimum.
Mr and Mrs. R Roux owned a one bedroom flat in Earl Shilton in March 1996. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Identical homes in Earl Shilton with 100 year plus lease were worth £225,800. The average amount of ground rent was £60 collected quarterly. The lease elapsed on 28 October 2085. Having 60 years outstanding we calculated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including legals.
Last Christmas we were approach by Mr and Mrs. J Bonnet , who purchased a one bedroom flat in Earl Shilton in April 2007. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Similar residencies in Earl Shilton with an extended lease were worth £210,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease finished on 14 October 2105. Taking into account 80 years remaining we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.