Shotton 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 becomes more expensive. Legislation has been in place for sometime now allowing qualifying Shotton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Shotton you would be well advised to investigate if your lease has between seventy and ninety years left. There are good reasons why a Shotton flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety 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 |
|---|---|
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
| Yorkshire 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. |
Engaging our service gives you better control over the value of your Shotton leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Ibrahim was the the leasehold proprietor of a conversion apartment in Shotton on the market with a lease of a few days over 61 years unexpired. Ibrahim on an informal basis approached his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be due on a lease extension were Ibrahim to invoke his statutory right. Ibrahim obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr I Lefèvre moved into a basement flat in Shotton in November 1996. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Identical premises in Shotton with an extended lease were valued about £205,000. The average ground rent payable was £50 collected yearly. The lease elapsed in 2104. Given that there were 79 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £7,600 and £8,800 not including legals.
Last Winter we were contacted by Mrs Katie Scott , who took over the lease of a one bedroom apartment in Shotton in November 2003. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparable premises in Shotton with 100 year plus lease were worth £270,000. The mid-range amount of ground rent was £65 invoiced yearly. The lease ended in 2093. Having 68 years remaining we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.