Shenfield leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Most owners of residential leasehold property in Shenfield enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Shenfield you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Shenfield with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Shenfield,the lease extension experts 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 Shenfield valuers.
During the course of the last few months Edward, started to get near to the eighty-year threshold with the lease on his garden flat in Shenfield. In buying his home two decades ago, the unexpired term was of little bearing. Fortunately, he realised he needed to take action soon on a lease extension. Edward extended the lease just under the wire last April. Edward and the landlord who owned the flat above subsequently agreed on an amount of £5,000 . If the lease had slipped to less than 80 years, the amount would have become more costly by at least £1,100.
Last November we were phoned by Mrs Gemma David , who acquired a basement apartment in Shenfield in January 2012. The dilemma was if we could approximate the price would be for a ninety year lease extension. Comparative residencies in Shenfield with a long lease were valued around £260,000. The average ground rent payable was £50 collected every twelve months. The lease finished on 17 September 2098. Taking into account 72 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2013 we were e-mailed by Mr and Mrs. L Jackson who, having was assigned a lease of a basement apartment in Shenfield in January 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative residencies in Shenfield with 100 year plus lease were valued about £261,600. The mid-range amount of ground rent was £60 collected every twelve months. The lease concluded in 2078. Taking into account 52 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 plus professional charges.