The rule of thumb is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Shaftesbury can extend the lease for an additional 90 years under statute. Do think carefully before delaying your Shaftesbury lease extension. Shelving that expense today simply escalates the price you will ultimately have to pay for a lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| 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. |
The lawyers that we work with handle Shaftesbury 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.
Last Winter Sebastian, came precariously close to the 80-year mark with the lease on his leasehold apartment in Shaftesbury. In buying his home 18 years previously, the unexpired term was of little concern. Thankfully, he recognised he needed to take action soon on Extending the lease. Sebastian arranged for a lease extension just in the nick of time in March. Sebastian and the freeholder via the management company in the end settled on a premium of £5,500 . If he not met the deadline, the premium would have escalated by a minimum £1,000.
In 2012 we were called by Mr and Mrs. Y André who, having acquired a one bedroom flat in Shaftesbury in September 2000. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Comparative residencies in Shaftesbury with 100 year plus lease were valued about £295,000. The mid-range ground rent payable was £45 collected per annum. The lease came to a finish in 2100. Considering the 74 years left we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.
In 2011 we were contacted by Mr and Mrs. C Murphy who, having was assigned a lease of a basement flat in Shaftesbury in November 1995. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar homes in Shaftesbury with an extended lease were valued around £243,000. The mid-range amount of ground rent was £65 invoiced quarterly. The lease ran out in 2089. Having 63 years left we approximated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 not including fees.