Shawbury residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Shawbury 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.
Finley owned a 2 bedroom flat in Shawbury on the market with a lease of a few days over sixty years outstanding. Finley informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Finley to exercise his statutory right. Finley procured expert advice and secured an acceptable resolution informally and readily saleable.
Mr and Mrs. D Martin was assigned a lease of a studio flat in Shawbury in February 2012. The dilemma was if we could approximate the premium would be to extend the lease by an additional years. Comparable homes in Shawbury with an extended lease were in the region of £200,000. The mid-range ground rent payable was £50 collected yearly. The lease terminated on 17 May 2104. Having 78 years as a residual term we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of legals.
Last Autumn we were phoned by Mrs Grace Jackson , who took over the lease of a studio apartment in Shawbury in November 2005. The question was if we could approximate the premium would be for a 90 year lease extension. Similar flats in Shawbury with an extended lease were worth £267,600. The mid-range ground rent payable was £65 collected quarterly. The lease end date was on 20 November 2093. Taking into account 67 years unexpired we calculated the premium to the landlord for the lease extension to be within £14,300 and £16,400 plus legals.