It’s an underpublicised truth that a Shildon residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Shildon property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying 50% 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 Most leasehold owners in Shildon will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes 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 process.
Leasehold residencies in Shildon with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Shildon leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Harrison, started to get near to the 80-year threshold with the lease on his first floor flat in Shildon. In buying his property 18 years ago, the lease term was of little relevance. As luck would have it, he realised he needed to take action soon on Extending the lease. Harrison arranged for a lease extension at the eleventh hour in April. Harrison and the landlord eventually settled on a premium of £5,000 . If he not met the deadline, the price would have become more exhorbitant by a minimum £875.
Ms Imogen Lefèvre purchased a one bedroom flat in Shildon in June 1998. We are asked if we could approximate the premium could be to prolong the lease by a further 90 years. Identical properties in Shildon with 100 year plus lease were worth £201,200. The mid-range amount of ground rent was £55 billed quarterly. The lease finished in 2081. Taking into account 56 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of legals.
Mr and Mrs. G Parker completed a one bedroom apartment in Shildon in July 2012. The dilemma was if we could approximate the price could be to extend the lease by 90 years. Identical premises in Shildon with a long lease were in the region of £300,000. The average ground rent payable was £50 collected monthly. The lease elapsed on 3 February 2101. Given that there were 76 years as a residual term we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including legals.