The re-sale value of a leasehold property in Great Shelford is impacted by how many years the lease has left to run. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. Ideally one should start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be concluded well before the eighty year cut off point. Leasehold Reform legislation entitles Great Shelford qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of ninety years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Great Shelford with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with procure Great Shelford 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 conveyancer we work with provide it.
Following unsuccessful correspondence with the landlord of her basement apartment in Great Shelford, Ellen started the lease extension process as the 80 year mark was rapidly approaching. The legal work was finalised in November 2013. The freeholder’s charges were restricted to under 600 GBP.
Last Autumn we were approach by Mr A Rivera , who took over the lease of a one bedroom flat in Great Shelford in February 2002. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Similar residencies in Great Shelford with a long lease were in the region of £255,000. The average ground rent payable was £50 collected per annum. The lease expired on 14 January 2097. Having 71 years remaining we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Last Christmas we were called by Mr and Mrs. C Clarke , who acquired a purpose-built apartment in Great Shelford in March 2009. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparable properties in Great Shelford with an extended lease were in the region of £254,200. The mid-range ground rent payable was £60 invoiced yearly. The lease termination date was in 2077. Given that there were 51 years left we estimated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 not including costs.