It’s an underpublicised truth that a Shinfield residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Shinfield property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be due. Most leasehold owners in Shinfield will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Shinfield with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Shinfield,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shinfield valuers.
Off the back of protracted negotiations with the freeholder of her purpose-built flat in Shinfield, Zoe commenced the lease extension process as the eighty year mark was rapidly advancing. The lease extension completed in November 2007. The landlord’s fees were kept to an absolute minimum.
Dr Daisy Flores moved into a first floor flat in Shinfield in August 1998. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Similar residencies in Shinfield with 100 year plus lease were in the region of £210,600. The average amount of ground rent was £45 billed quarterly. The lease concluded on 6 August 2087. Given that there were 62 years left we approximated the premium to the landlord for the lease extension to be between £18,100 and £20,800 not including costs.
Mrs Bethany Sánchez took over the lease of a studio flat in Shinfield in February 2007. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical residencies in Shinfield with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed per annum. The lease finished in 2098. Taking into account 73 years outstanding we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.