Shenfield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Shenfield residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Shenfield you must check if your lease has between 70 and 90 years remaining. There are good reasons why a Shenfield flat owner with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Shenfield,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shenfield valuers.
18 months ago Max, came dangerously near to the 80-year mark with the lease on his studio apartment in Shenfield. In buying his flat two decades ago, the length of the lease was of little importance. Thankfully, he noticed he would soon be paying an inflated amount for Extending the lease. Max arranged for a lease extension just under the wire in August. Max and the freeholder via the managing agents subsequently settled on a premium of £5,500 . If he had missed the deadline, the sum would have increased by a minimum £850.
Last April we were approach by Mr and Mrs. L Gómez , who owned a garden apartment in Shenfield in February 1998. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparable premises in Shenfield with an extended lease were valued around £255,000. The average amount of ground rent was £50 invoiced quarterly. The lease ran out on 20 September 2096. Considering the 70 years left we estimated the premium to the freeholder for the lease extension to be within £10,500 and £12,000 exclusive of professional charges.
Last Spring we were approach by Mr and Mrs. J Reed , who acquired a newly refurbished apartment in Shenfield in May 2004. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in Shenfield with a long lease were in the region of £246,800. The average amount of ground rent was £60 collected annually. The lease concluded in 2076. Considering the 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 not including legals.