Shaftesbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Shaftesbury enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Shaftesbury you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with undertake 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 conveyancer we work with provide it.
Off the back of lengthy negotiations with the landlord of her first floor apartment in Shaftesbury, Freya initiated the lease extension process just as her lease was nearing the crucial eighty-year threshold. The transaction was finalised in August 2011. The landlord’s costs were negotiated to below six hundred pounds.
Last Christmas we were e-mailed by Mr and Mrs. M Bernard , who took over the lease of a first floor apartment in Shaftesbury in August 2000. The question was if we could shed any light on how much (approximately) premium would be to prolong the lease by ninety years. Similar homes in Shaftesbury with a long lease were worth £235,600. The mid-range amount of ground rent was £60 billed monthly. The lease came to a finish in 2087. Having 62 years left we estimated the premium to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of legals.
In 2011 we were e-mailed by Mrs Leah André who, having was assigned a lease of a one bedroom flat in Shaftesbury in November 1997. The question was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Comparable properties in Shaftesbury with a long lease were valued about £174,200. The mid-range amount of ground rent was £55 collected per annum. The lease termination date was in 2076. Considering the 51 years left we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of costs.