The market value of Shildon leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the remaining term is less than eighty years
Leasehold residencies in Shildon with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Shildon leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Connor was the the leasehold proprietor of a 2 bedroom flat in Shildon on the market with a lease of a few days over 72 years outstanding. Connor informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Connor to exercise his statutory right. Connor obtained expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Mr and Mrs. C Bennett purchased a one bedroom flat in Shildon in September 2003. The dilemma was if we could approximate the price would be for a ninety year lease extension. Comparable homes in Shildon with an extended lease were in the region of £275,000. The mid-range ground rent payable was £45 billed yearly. The lease end date was in 2094. Having 69 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
Last month we were phoned by Dr R André , who took over the lease of a one bedroom apartment in Shildon in February 1998. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Identical flats in Shildon with 100 year plus lease were in the region of £216,000. The mid-range amount of ground rent was £60 collected per annum. The lease ended on 23 August 2083. Having 58 years unexpired we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including costs.