With a residential leasehold property in Shrewton, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are less than 80 years remaining. Residents in Shrewton with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. When the lease term has under 80 years remaining, under the relevant Act the landlord is entitled to calculate and demand a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Halifax | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Shrewton 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 conveyancer we work with provide it.
Last Summer Jamie, came seriously close to the eighty-year mark with the lease on his garden apartment in Shrewton. Having bought his property twenty years ago, the unexpired term was of minimal bearing. Thankfully, he noticed he needed to take steps soon on Extending the lease. Jamie was able to extend his lease at the eleventh hour in May. Jamie and the freeholder via the managing agents in the end settled on an amount of £6,000 . If the lease had slid lower than eighty years, the premium would have gone up by at least £1,000.
In 2009 we were e-mailed by Dr T Rivera who, having moved into a one bedroom flat in Shrewton in July 2012. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparable flats in Shrewton with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £65 billed quarterly. The lease terminated in 2093. Having 68 years as a residual term we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus costs.
Mr Thomas Turner acquired a first floor apartment in Shrewton in June 2012. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Identical premises in Shrewton with a long lease were in the region of £213,600. The mid-range ground rent payable was £60 billed yearly. The lease ran out in 2082. Considering the 57 years remaining we estimated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including expenses.