The market value of a leasehold property in Shinfield and Arborfield is impacted by how long the lease has left to run. If it is near to or less than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that all matters can be addressed in advance of the eighty year mark. Current legislation entitles Shinfield and Arborfield qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Shinfield and Arborfield with in excess of one hundred years left on the lease are often regarded as a ‘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 upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you increased control over the value of your Shinfield and Arborfield leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Connor owned a 2 bedroom flat in Shinfield and Arborfield being sold with a lease of fraction over 59 years unexpired. Connor on an informal basis contacted his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Connor to exercise his statutory right. Connor procured expert advice and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
Dr John Adams was assigned a lease of a ground floor flat in Shinfield and Arborfield in November 2003. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar premises in Shinfield and Arborfield with a long lease were worth £242,600. The mid-range ground rent payable was £45 collected quarterly. The lease lapsed in 2093. Considering the 67 years remaining we estimated the compensation to the landlord to extend the lease to be between £11,400 and £13,200 not including costs.
Mr U Gunderson was assigned a lease of a basement apartment in Shinfield and Arborfield in June 2002. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Similar residencies in Shinfield and Arborfield with an extended lease were in the region of £280,000. The mid-range amount of ground rent was £55 collected monthly. The lease finished in 2104. Having 78 years left we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus fees.