Shrewsbury leases on domestic deteriorating in value. Where your lease has in the region of ninety years left, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for a lease extension to take place before the term of the current lease drops under 80 years - otherwise a higher premium will be due. Flat owners in Shrewsbury will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm if you qualify. In some circumstances you may not qualify. There are prescribed timetables and formalities to follow once the process has started so it’s prudent to be guided by a lawyer during the process.
Leasehold residencies in Shrewsbury with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service gives you enhanced control over the value of your Shrewsbury leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Ollie was the the leasehold owner of a high value apartment in Shrewsbury on the market with a lease of a little over 61 years remaining. Ollie on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Ollie to exercise his statutory right. Ollie procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
In 2013 we were approached by Mr I Moore who, having was assigned a lease of a newly refurbished flat in Shrewsbury in August 1996. The question was if we could estimate the premium would likely be for a 90 year lease extension. Identical homes in Shrewsbury with a long lease were worth £290,000. The mid-range ground rent payable was £45 billed every twelve months. The lease came to a finish in 2099. Given that there were 73 years as a residual term we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.
In 2014 we were contacted by Dr Freddie Lefebvre who, having moved into a ground floor apartment in Shrewsbury in September 1997. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Shrewsbury with 100 year plus lease were in the region of £240,600. The mid-range amount of ground rent was £60 collected per annum. The lease finished on 27 October 2088. Having 62 years remaining we estimated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.