The market value of a leasehold property in Shawbury is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that all matters can be addressed prior to the eighty year cut off point. Statute enables Shawbury qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Shawbury,the lease extension lawyers 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 Shawbury valuers.
Toby owned a 2 bedroom apartment in Shawbury being marketed with a lease of a few days over fifty eight years left. Toby informally contacted his landlord a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Toby to exercise his statutory right. Toby procured expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
Mr and Mrs. T Bonnet moved into a one bedroom flat in Shawbury in November 1996. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Identical properties in Shawbury with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 collected per annum. The lease finished in 2104. Having 79 years unexpired we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.
Mr and Mrs. R Anderson acquired a one bedroom flat in Shawbury in February 1997. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Identical homes in Shawbury with a long lease were in the region of £275,000. The mid-range amount of ground rent was £65 collected every twelve months. The lease ended on 5 January 2093. Given that there were 68 years remaining we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of expenses.