Unfortunately that a Great Shelford 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 depreciation being disguised by increases in the Great Shelford property market.Once your lease gets to 85ish years, 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 dips below 80 years - otherwise a higher premium will be payable. Most flat owners in Great Shelford will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold premises in Great Shelford with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Great Shelford can be a difficult process. We recommend you get professional help from a conveyancer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Great Shelford lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Sam, started to get close to the 80-year threshold with the lease on his garden flat in Great Shelford. In buying his flat 19 years previously, the lease term was of little importance. As luck would have it, he became aware that he would imminently be paying an escalated premium for Extending the lease. Sam arranged for a lease extension just in the nick of time last March. Sam and the freeholder via the managing agents eventually settled on sum of £6,000 . If the lease had dropped lower than 80 years, the sum would have become more costly by a minimum £1,000.
In 2010 we were approached by Mr I Thompson who, having bought a garden apartment in Great Shelford in August 2003. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparable premises in Great Shelford with a long lease were valued around £275,000. The mid-range amount of ground rent was £55 collected per annum. The lease finished on 11 August 2101. Taking into account 76 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.
Dr Arthur Green moved into a one bedroom flat in Great Shelford in January 2003. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Identical flats in Great Shelford with a long lease were valued about £176,200. The mid-range ground rent payable was £65 invoiced every twelve months. The lease ended on 24 February 2081. Given that there were 56 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £29,500 and £34,000 plus professional charges.