The market value of a leasehold property in Great Shelford depends on how many years the lease has left to run. If it is close to or less than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to start the lease extension process when the lease still has 82 years to run so that a lease extension can be finalised prior to the eighty year threshold. Current legislation enables Great Shelford qualifying lessees to an additional term of 90 years on top of the unexpired term, at a notional rent (no ground rent). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Great Shelford with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle 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 conveyancing solicitor we work with provide it.
After lengthy discussions with the freeholder of her basement flat in Great Shelford, Leah commenced the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work completed in July 2008. The landlord’s fees were kept to an absolute minimum.
Mr H André owned a first floor apartment in Great Shelford in May 2006. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical properties in Great Shelford with an extended lease were valued about £193,400. The average amount of ground rent was £65 invoiced yearly. The lease came to a finish in 2085. Having 59 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 plus professional charges.
In 2014 we were e-mailed by Mr Elijah Howard who, having bought a purpose-built apartment in Great Shelford in September 2011. We are asked if we could approximate the premium could be to extend the lease by ninety years. Identical premises in Great Shelford with a long lease were worth £255,000. The mid-range amount of ground rent was £50 collected quarterly. The lease ended on 17 January 2096. Considering the 70 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.