When it comes to domestic leasehold premises in Shenstone, you are actually purchasing a right to live in a property for a prescribed time frame. Modern 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 think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Anyone in Shenstone with a lease approaching 81 years left should seriously think of extending it without delay. Once the lease term has below eighty years remaining, under the relevant Act the landlord can calculate and demand a greater amount, based on a technical calculation, strangely termed as “marriage value” which is due.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancers that we work with undertake Shenstone 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.
18 months ago George, started to get near to the eighty-year mark with the lease on his basement apartment in Shenstone. Having purchased his home 19 years ago, the lease term was of no relevance. Fortunately, he became aware that he needed to take steps soon on Extending the lease. George was able to extend his lease just under the wire in April. George and the landlord in the end settled on the final figure of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £925.
Last Summer we were e-mailed by Mr Sam Moreau , who completed a ground floor flat in Shenstone in April 2000. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative flats in Shenstone with an extended lease were in the region of £210,000. The average ground rent payable was £50 collected annually. The lease terminated in 2105. Considering the 80 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.
In 2012 we were approached by Mr and Mrs. K Martinez who, having bought a garden flat in Shenstone in October 2008. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Similar properties in Shenstone with an extended lease were worth £275,000. The mid-range amount of ground rent was £45 billed monthly. The lease termination date was on 21 March 2094. Considering the 69 years unexpired we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.