Unfortunately that a Shepton Mallet residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Shepton Mallet property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining slips under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Shepton Mallet will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with in excess of 100 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 property will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
Retaining our service gives you increased control over the value of your Shepton Mallet leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Eli owned a high value apartment in Shepton Mallet on the market with a lease of a little over 61 years remaining. Eli informally contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder 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 Eli to exercise his statutory right. Eli obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2011 we were called by Dr S Mason who, having acquired a one bedroom apartment in Shepton Mallet in September 2007. The dilemma was if we could estimate the price would be for a ninety year lease extension. Comparable properties in Shepton Mallet with 100 year plus lease were worth £233,200. The mid-range ground rent payable was £60 billed annually. The lease lapsed on 19 July 2087. Taking into account 61 years left we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus legals.
In 2011 we were approached by Mr and Mrs. D Lambert who, having completed a basement flat in Shepton Mallet in September 2004. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Identical properties in Shepton Mallet with 100 year plus lease were worth £171,800. The average amount of ground rent was £55 billed yearly. The lease concluded on 14 June 2076. Having 50 years outstanding we estimated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 plus fees.