For anyone whose Shortlands flat is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Shortlands leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Ryan, came very close to the 80-year mark with the lease on his purpose- built apartment in Shortlands. Having bought his home twenty years ago, the length of the lease was of no concern. Luckily, he realised he would imminently be paying way over the odds for a lease extension. Ryan arranged for a lease extension at the eleventh hour last June. Ryan and the freeholder eventually agreed on the final figure of £6,000 . If he not met the deadline, the figure would have escalated by at least £1,100.
Last Summer we were approach by Mr P Martinez , who moved into a one bedroom flat in Shortlands in June 2003. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Shortlands with an extended lease were valued about £181,600. The average ground rent payable was £55 invoiced monthly. The lease elapsed in 2077. Taking into account 52 years remaining we estimated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Shortlands property is Ravensbourne Lodge 4 Highland Road in February 2013. the Tribunal held that the amount payable for the freehold was £22,268