Shepshed leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Shepshed residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Shepshed you must check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Shepshed with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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. |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Shepshed,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shepshed valuers.
In 2014 Hunter, came seriously close to the 80-year threshold with the lease on his two bedroom apartment in Shepshed. Having bought his flat two decades ago, the length of the lease was of no bearing. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Hunter arranged for a lease extension at the eleventh hour last March. Hunter and the freeholder via the management company subsequently agreed on a premium of £6,000 . If he not met the deadline, the price would have become more exhorbitant by at least £1,000.
Mr and Mrs. B Gómez moved into a ground floor apartment in Shepshed in March 1999. The question was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Similar residencies in Shepshed with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 invoiced quarterly. The lease elapsed in 2089. Having 63 years left we estimated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 plus expenses.
Last Winter we were e-mailed by Mr J Morel , who was assigned a lease of a recently refurbished apartment in Shepshed in July 2003. The dilemma was if we could estimate the price could be to extend the lease by 90 years. Similar premises in Shepshed with a long lease were in the region of £181,600. The average amount of ground rent was £55 collected per annum. The lease end date was in 2078. Taking into account 52 years unexpired we calculated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 not including fees.