As the the remaining lease term of a Shard End domestic lease diminished so does its value and therefore the value of your property. Where the lease has, in excess of one hundred years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease sooner rather than later. Most flat owners in Shard End will qualify for this right; that being said a conveyancing solicitor should be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Shard End,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shard End valuers.
Subsequent to unsuccessful discussions with the landlord of her studio apartment in Shard End, Erin commenced the lease extension process just as her lease was nearing the crucial eighty-year threshold. The legal work was finalised in March 2007. The landlord’s costs were kept to an absolute minimum.
In 2009 we were approached by Dr Megan Lee who, having was assigned a lease of a first floor flat in Shard End in October 1995. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Comparable flats in Shard End with an extended lease were worth £183,600. The average amount of ground rent was £65 collected annually. The lease terminated in 2082. Considering the 57 years outstanding we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.
Dr O Walker took over the lease of a first floor flat in Shard End in February 2002. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Comparative flats in Shard End with 100 year plus lease were valued around £250,000. The average amount of ground rent was £50 invoiced quarterly. The lease elapsed in 2093. Given that there were 68 years unexpired we estimated the premium to the freeholder to extend the lease to be within £10,500 and £12,000 plus costs.