Shenstone leases on domestic properties are gradually losing value. Where your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. If lease term dips under 80 years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Shenstone will usually be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In some circumstances you may not be entitled. There are prescribed deadlines and steps to follow once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Shenstone with more than 100 years left 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 to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| 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 are not acceptable. 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with handle 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 lawyer we work with provide it.
Trailing unsuccessful discussions with the freeholder of her ground floor flat in Shenstone, Isabelle started the lease extension process as the 80 year deadline was rapidly approaching. The transaction was concluded in May 2013. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. U Stewart was assigned a lease of a purpose-built flat in Shenstone in November 2008. The question was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparable homes in Shenstone with 100 year plus lease were valued about £191,400. The mid-range amount of ground rent was £55 collected yearly. The lease lapsed in 2080. Having 54 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 not including legals.
Mr S Robinson bought a one bedroom apartment in Shenstone in July 2001. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Similar properties in Shenstone with a long lease were in the region of £295,000. The average ground rent payable was £45 billed monthly. The lease ran out in 2100. Given that there were 74 years unexpired we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.