For anyone whose Earl Shilton property is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
Leasehold premises in Earl Shilton with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Earl Shilton,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Earl Shilton valuers.
Off the back of protracted correspondence with the landlord of her first floor flat in Earl Shilton, Francesca initiated the lease extension process as the 80 year deadline was swiftly advancing. The transaction was concluded in September 2006. The freeholder’s costs were kept to an absolute minimum.
Last Winter we were contacted by Mrs Amber Richardson , who bought a basement flat in Earl Shilton in June 2006. We are asked if we could estimate the price would likely be for a 90 year lease extension. Similar properties in Earl Shilton with 100 year plus lease were in the region of £166,800. The average ground rent payable was £50 billed yearly. The lease came to a finish on 24 January 2076. Given that there were 50 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including expenses.
In 2011 we were approached by Mr and Mrs. S Gunderson who, having bought a one bedroom flat in Earl Shilton in February 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Identical flats in Earl Shilton with an extended lease were valued about £280,000. The mid-range ground rent payable was £45 invoiced yearly. The lease came to a finish in 2096. Considering the 70 years outstanding we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.