Shenfield leases on residential deteriorating in value. Where your lease has approximately 90 years remaining, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start incurring an additional element called marriage value. Leasehold owners in Shenfield will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In certain cases you may not be entitled. There are also strict timetables and formalities to comply with once the process has started so it’s sensible to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your Shenfield leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Jacob, started to get near to the 80-year mark with the lease on his leasehold flat in Shenfield. In buying his property twenty years ago, the unexpired term was of minimal interest. Fortunately, he became aware that he needed to take steps soon on a lease extension. Jacob arranged for a lease extension at the eleventh hour last July. Jacob and the freeholder via the managing agents eventually settled on the final figure of £5,000 . If the lease had descended to less than eighty years, the figure would have increased by a minimum £950.
Mr Jack Lewis moved into a one bedroom apartment in Shenfield in May 2004. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar flats in Shenfield with a long lease were valued about £275,000. The average ground rent payable was £55 billed monthly. The lease ran out in 2102. Having 76 years outstanding we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
Dr Hannah Ali took over the lease of a ground floor apartment in Shenfield in February 2004. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Shenfield with 100 year plus lease were valued about £176,200. The mid-range amount of ground rent was £65 collected yearly. The lease concluded in 2082. Considering the 56 years unexpired we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 plus fees.