Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Shepperton. Clearly, the term of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the residence has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Shepperton have the right to extend the lease for an additional ninety years in accordance with statute. You should give careful deliberation before putting off your Shepperton lease extension. Holding off the cost now only increases the price you will eventually incur to extend your lease
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
The conveyancing solicitors that we work with procure Shepperton 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.
After protracted negotiations with the freeholder of her leasehold flat in Shepperton, Molly commenced the lease extension process as the 80 year deadline was quickly coming. The legal work was finalised in November 2013. The landlord’s costs were restricted to less than 650 GBP.
Mr Matthew Garcia bought a purpose-built flat in Shepperton in February 2005. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Similar properties in Shepperton with a long lease were worth £285,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease came to a finish on 10 July 2106. Given that there were 80 years outstanding we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
An example of a Lease Extension decision for a Shepperton property is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case affected 1 flat. The unexpired term as at the valuation date was 82.93 years.