The market value of Shaftesbury leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is less than eighty years
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Shaftesbury,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shaftesbury valuers.
Last Christmas Tyler, started to get close to the eighty-year mark with the lease on his purpose- built flat in Shaftesbury. In buying his flat two decades ago, the length of the lease was of minimal concern. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Tyler arranged for a lease extension just under the wire in August. Tyler and the landlord who owned the flat above subsequently settled on sum of £5,000 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £1,050.
Last Summer we were e-mailed by Dr Ellie Lefebvre , who owned a first floor apartment in Shaftesbury in July 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Comparative flats in Shaftesbury with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease ran out on 4 September 2102. Given that there were 77 years outstanding we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including legals.
Last Summer we were phoned by Dr B Harris , who acquired a basement flat in Shaftesbury in January 2012. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Similar properties in Shaftesbury with an extended lease were in the region of £260,200. The mid-range ground rent payable was £65 collected quarterly. The lease terminated in 2091. Having 66 years outstanding we approximated the premium to the landlord to extend the lease to be between £16,200 and £18,600 not including professional charges.