When it comes to domestic leasehold premises in Shepton Mallet, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years 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 consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Leasehold owners in Shepton Mallet with a lease drawing near to 81 years remaining should seriously think of extending it without delay. When a lease has fewer than eighty years outstanding, under the relevant statute the freeholder can calculate and demand a greater amount, based on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 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 in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Shepton Mallet 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.
Subsequent to protracted negotiations with the freeholder of her basement flat in Shepton Mallet, Molly started the lease extension process as the 80 year deadline was swiftly coming. The lease extension was concluded in May 2008. The landlord’s costs were kept to an absolute minimum.
Dr M García took over the lease of a studio apartment in Shepton Mallet in January 1997. The question was if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparable premises in Shepton Mallet with a long lease were worth £275,000. The average amount of ground rent was £65 billed yearly. The lease elapsed on 25 June 2093. Given that there were 68 years as a residual term we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of expenses.
Last month we were phoned by Mr and Mrs. T Moreau , who moved into a purpose-built flat in Shepton Mallet in November 2008. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar flats in Shepton Mallet with an extended lease were in the region of £208,600. The average amount of ground rent was £60 invoiced per annum. The lease ran out on 5 July 2082. Taking into account 57 years outstanding we calculated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of legals.