It’s a harsh truth that a Shepshed residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Shepshed property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term falls below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Shepshed will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the premises 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Shepshed,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shepshed valuers.
Ollie was the the leasehold proprietor of a studio flat in Shepshed being sold with a lease of a little over sixty years remaining. Ollie on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Ollie to exercise his statutory right. Ollie procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Dr Kirsty Murphy took over the lease of a garden flat in Shepshed in April 2001. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Similar flats in Shepshed with 100 year plus lease were worth £257,800. The average amount of ground rent was £65 invoiced annually. The lease came to a finish in 2091. Having 65 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of costs.
Last Christmas we were approach by Dr Harvey Roberts , who completed a purpose-built flat in Shepshed in March 1998. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Identical flats in Shepshed with an extended lease were in the region of £191,400. The mid-range ground rent payable was £55 collected every twelve months. The lease finished on 19 July 2080. Taking into account 54 years outstanding we calculated the premium to the landlord for the lease extension to be within £34,200 and £39,600 plus expenses.