For anyone whose Shinfield property is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
Leasehold properties in Shinfield with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Shinfield leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kyle was the the leasehold proprietor of a high value apartment in Shinfield on the market with a lease of fraction over fifty eight years remaining. Kyle on an informal basis contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Kyle to exercise his statutory right. Kyle obtained expert legal guidance and secured an acceptable resolution informally and sell the property.
In 2010 we were e-mailed by Dr Adam Campbell who, having purchased a ground floor apartment in Shinfield in March 1995. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Identical residencies in Shinfield with a long lease were in the region of £261,600. The average ground rent payable was £60 invoiced yearly. The lease concluded on 27 September 2078. Having 52 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £39,000 and £45,000 plus fees.
Ms J Moore bought a studio apartment in Shinfield in June 2001. The dilemma was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparative homes in Shinfield with a long lease were valued about £218,000. The average ground rent payable was £45 collected annually. The lease termination date was on 10 January 2089. Taking into account 63 years unexpired we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 not including legals.