Shrewsbury leases on residential deteriorating in value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Shrewsbury will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not qualify. There are prescribed timetables and steps to comply with 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 often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit 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. |
| 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; |
| Birmingham Midshires | 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. |
| 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. |
The lawyers that we work with procure Shrewsbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Trailing unsuccessful discussions with the freeholder of her garden apartment in Shrewsbury, Sophie initiated the lease extension process as the 80 year deadline was quickly coming. The lease extension was finalised in August 2005. The freeholder’s charges were negotiated to approximately 450 pounds.
Last Summer we were contacted by Mr and Mrs. B Hernández , who took over the lease of a ground floor apartment in Shrewsbury in October 1998. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable premises in Shrewsbury with a long lease were in the region of £181,600. The average ground rent payable was £55 billed annually. The lease terminated on 14 November 2077. Having 52 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of fees.
Last September we were approach by Dr D Ricardo , who was assigned a lease of a newly refurbished flat in Shrewsbury in October 2000. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Comparative flats in Shrewsbury with 100 year plus lease were valued around £285,000. The average amount of ground rent was £45 collected monthly. The lease lapsed on 20 January 2097. Given that there were 72 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus fees.