Shard End 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 your lease gets more expensive. It is the case that most Shard End tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Shard End you should see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold premises in Shard End with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 conveyancers that we work with undertake Shard End 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.
Cameron was the the leasehold proprietor of a studio flat in Shard End on the market with a lease of a few days over 59 years outstanding. Cameron informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Cameron to exercise his statutory right. Cameron obtained expert advice and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2010 we were e-mailed by Mrs O Brooks who, having bought a one bedroom apartment in Shard End in July 1998. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Comparative residencies in Shard End with an extended lease were worth £250,000. The mid-range ground rent payable was £50 invoiced per annum. The lease expiry date was on 2 October 2094. Taking into account 69 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.
Mr and Mrs. V Jones owned a basement flat in Shard End in April 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Similar properties in Shard End with an extended lease were worth £290,000. The average ground rent payable was £60 collected every twelve months. The lease came to a finish on 23 June 2105. Taking into account 80 years outstanding we calculated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 plus costs.