With a domestic leasehold property in Shenley, you are actually purchasing a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly when there are less than 80 years left. Leasehold owners in Shenley with a lease approaching 81 years left should seriously think of extending it without delay. Once a lease has under eighty years left, under the current statute the landlord can calculate and charge a greater amount, assessed on a technical calculation, known as “marriage value” which is due.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
The conveyancers that we work with handle Shenley 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.
Liam owned a 2 bedroom flat in Shenley being marketed with a lease of just over sixty years left. Liam on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Liam to exercise his statutory right. Liam obtained expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
Last Winter we were contacted by Dr R James , who bought a garden apartment in Shenley in September 2007. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Similar properties in Shenley with an extended lease were worth £237,600. The average ground rent payable was £45 invoiced per annum. The lease elapsed in 2092. Taking into account 67 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Shenley residence is Ground Floor Maisonette 17 Milton Road in January 2014. The Tribunal determined the premium payable by the Applicant to the should be £13,299 This case related to 1 flat. The unexpired residue of the current lease was 71.73 years.