Shenfield leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Shenfield residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Shenfield you would be well advised to check if your lease has between 70 and 90 years left. There are good reasons why a Shenfield leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay
Leasehold residencies in Shenfield with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Shenfield 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.
In recent months Finley, started to get near to the eighty-year threshold with the lease on his first floor apartment in Shenfield. Having bought his flat 18 years previously, the lease term was of little relevance. by good luck, he realised he needed to take steps soon on a lease extension. Finley extended the lease just under the wire in March. Finley and the freeholder via the managing agents in the end settled on the final figure of £5,000 . If he failed to meet the deadline, the price would have escalated by at least £1,075.
Last Spring we were phoned by Mr and Mrs. S Sánchez , who bought a first floor flat in Shenfield in May 1995. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparable homes in Shenfield with 100 year plus lease were valued around £191,000. The mid-range ground rent payable was £65 invoiced quarterly. The lease expired in 2083. Taking into account 58 years remaining we approximated the premium to the landlord for the lease extension to be within £23,800 and £27,400 not including costs.
Last Christmas we were phoned by Mr and Mrs. L Brooks , who took over the lease of a one bedroom apartment in Shenfield in January 2009. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Shenfield with a long lease were valued around £250,000. The average amount of ground rent was £50 collected annually. The lease ran out on 18 May 2094. Taking into account 69 years left we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.