Sheldon leases on domestic deteriorating in value. Where your lease has approximately ninety years remaining, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Sheldon will usually qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to check your eligibility. In certain circumstances you may not be entitled. There are prescribed timetables and steps to comply with once the process has started so it’s wise to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure Sheldon 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 lawyer we work with provide it.
Joseph was the the leasehold proprietor of a conversion flat in Sheldon on the market with a lease of a little over 59 years unexpired. Joseph on an informal basis contacted his freeholder a well known London-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 £50 annually. Ordinarily, ground rent would not be due on a lease extension were Joseph to invoke his statutory right. Joseph obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
Last Christmas we were contacted by Mr and Mrs. S Turner , who owned a one bedroom apartment in Sheldon in November 1999. The question was if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Comparative flats in Sheldon with 100 year plus lease were valued about £280,000. The average amount of ground rent was £55 collected per annum. The lease ran out in 2104. Considering the 78 years as a residual term we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including costs.
Dr T Simon owned a purpose-built apartment in Sheldon in October 2010. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Identical properties in Sheldon with 100 year plus lease were worth £186,000. The mid-range ground rent payable was £65 invoiced every twelve months. The lease expired on 4 May 2084. Taking into account 58 years as a residual term we calculated the premium to the landlord to extend the lease to be between £24,700 and £28,600 plus fees.