The re-sale value of a leasehold property in Shenfield is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that formalities can be concluded in advance of the 80 year threshold. Current legislation entitles Shenfield qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Shenfield with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Bank of Scotland | |
| Godiva Mortgages | |
| Nationwide Building Society | |
| Santander |
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 conveyancer we work with provide it.
In recent months Mason, came seriously near to the eighty-year threshold with the lease on his ground floor flat in Shenfield. In buying his flat 18 years ago, the unexpired term was of minimal significance. Fortunately, he recognised he would soon be paying an escalated premium for Extending the lease. Mason was able to extend his lease just under the wire in May. Mason and the landlord subsequently settled on sum of £5,500 . If he not met the deadline, the figure would have become more exhorbitant by at least £850.
In 2013 we were called by Mr and Mrs. U Green who, having was assigned a lease of a basement apartment in Shenfield in January 2007. The question was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar properties in Shenfield with an extended lease were worth £173,800. The average ground rent payable was £60 invoiced quarterly. The lease came to a finish in 2081. Taking into account 55 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus expenses.
Dr Milo Bonnet purchased a studio apartment in Shenfield in August 2007. We are asked if we could estimate the price would be for a ninety year lease extension. Similar residencies in Shenfield with a long lease were worth £235,200. The average ground rent payable was £45 billed quarterly. The lease ran out in 2092. Having 66 years unexpired we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.