Shoeburyness leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Shoeburyness tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Shoeburyness you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Shoeburyness,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shoeburyness valuers.
Last Autumn Ali, came precariously close to the 80-year mark with the lease on his first floor flat in Shoeburyness. Having bought his home two decades ago, the length of the lease was of no significance. Fortunately, he became aware that he needed to take action soon on Extending the lease. Ali was able to extend his lease just ahead of time in March. Ali and the landlord ultimately agreed on sum of £5,000 . If the lease had slid below 80 years, the price would have gone up by at least £875.
In 2013 we were approached by Dr Niamh Martínez who, having was assigned a lease of a studio apartment in Shoeburyness in February 2005. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by a further 90 years. Comparative residencies in Shoeburyness with a long lease were valued around £290,000. The mid-range amount of ground rent was £45 billed per annum. The lease expiry date was on 16 January 2098. Having 72 years unexpired we estimated the premium to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of costs.
Mr and Mrs. O Clark owned a basement flat in Shoeburyness in July 2009. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Identical properties in Shoeburyness with a long lease were valued around £233,200. The mid-range ground rent payable was £60 billed monthly. The lease finished in 2087. Given that there were 61 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 not including legals.