Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Sharnbrook. Inevitably, the length of lease left shortens as time goes by. This may pass by relatively unnoticed when the property needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible long lease owners in Sharnbrook have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. You should give careful deliberation before delaying your Sharnbrook lease extension. Holding off the cost now only increases the price you will ultimately incur to extend your lease
Leasehold properties in Sharnbrook with more than one hundred years remaining on the lease are sometimes regarded as a ‘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 warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 gives you better control over the value of your Sharnbrook 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.
Last year Harrison, started to get close to the eighty-year mark with the lease on his studio flat in Sharnbrook. Having purchased his property twenty years previously, the unexpired term was of little interest. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Harrison extended the lease just under the wire last August. Harrison and the landlord who owned the flat above in the end settled on the final figure of £5,000 . If the lease had slipped lower than eighty years, the amount would have increased by a minimum £1,125.
In 2011 we were contacted by Ms U Dupont who, having bought a basement flat in Sharnbrook in August 2001. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparable flats in Sharnbrook with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 billed yearly. The lease expired on 10 March 2096. Having 70 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.
Mr T Rogers bought a first floor apartment in Sharnbrook in June 2011. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical premises in Sharnbrook with an extended lease were valued around £218,400. The mid-range amount of ground rent was £60 collected yearly. The lease termination date was in 2085. Having 59 years remaining we approximated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 not including legals.