Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Shaftesbury. Inevitably, the period of lease left reduces as time goes by. This may pass by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Shaftesbury have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Do give due attention before delaying your Shaftesbury lease extension. Putting off that expense now only increases the price you will eventually incur for a lease extension
Leasehold residencies in Shaftesbury with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Using our service gives you better control over the value of your Shaftesbury leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Reuben was the the leasehold proprietor of a studio apartment in Shaftesbury on the market with a lease of just over 61 years unexpired. Reuben on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Reuben to exercise his statutory right. Reuben procured expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
In 2009 we were approached by Dr C Moore who, having bought a purpose-built apartment in Shaftesbury in April 2010. The dilemma was if we could approximate the premium would likely be to prolong the lease by 90 years. Comparable homes in Shaftesbury with 100 year plus lease were worth £252,800. The mid-range ground rent payable was £65 invoiced monthly. The lease came to a finish on 8 August 2090. Taking into account 65 years unexpired we approximated the premium to the landlord to extend the lease to be between £17,100 and £19,800 not including costs.
Last November we were called by Mr Nathan Mason , who completed a purpose-built apartment in Shaftesbury in April 1996. The question was if we could approximate the price could be for a 90 year lease extension. Comparable homes in Shaftesbury with an extended lease were worth £191,400. The average ground rent payable was £55 invoiced annually. The lease expired in 2079. Having 54 years left we estimated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 plus expenses.