For those whose Shard End flat is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
It is generally accepted that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Shard End leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Charlie, started to get close to the eighty-year mark with the lease on his leasehold apartment in Shard End. In buying his home 19 years ago, the length of the lease was of no importance. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Charlie was able to extend his lease just under the wire in April. Charlie and the freeholder via the managing agents ultimately settled on an amount of £6,000 . If he failed to meet the deadline, the amount would have become more exhorbitant by at least £1,050.
In 2014 we were contacted by Mr Austin Wilson who, having bought a newly refurbished apartment in Shard End in May 2003. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Similar residencies in Shard End with an extended lease were in the region of £275,000. The average amount of ground rent was £55 invoiced monthly. The lease terminated on 25 March 2101. Given that there were 76 years remaining we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.
Mrs R Michel completed a ground floor flat in Shard End in October 2004. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Similar properties in Shard End with 100 year plus lease were in the region of £176,200. The average ground rent payable was £65 billed per annum. The lease elapsed on 24 October 2081. Given that there were 56 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of costs.