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. It is the case that most Shenfield tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Shenfield you really ought to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Shenfield,the lease extension solicitors that we work with will always be willing 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.
In 2014 James, came perilously close to the eighty-year mark with the lease on his studio flat in Shenfield. In buying his property 19 years ago, the lease term was of minimal bearing. by good luck, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. James arranged for a lease extension just under the wire last June. James and the landlord eventually settled on a premium of £5,000 . If he not met the deadline, the premium would have increased by a minimum £1,150.
Last Autumn we were phoned by Dr A David , who acquired a one bedroom flat in Shenfield in April 2001. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Comparative residencies in Shenfield with a long lease were worth £280,000. The mid-range ground rent payable was £55 billed monthly. The lease concluded in 2102. Given that there were 77 years unexpired we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.
Mrs Aimee Alexander took over the lease of a studio flat in Shenfield in February 2011. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Identical properties in Shenfield with a long lease were worth £183,600. The average ground rent payable was £65 invoiced annually. The lease expired in 2082. Taking into account 57 years remaining we approximated the premium to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of fees.