The market value of a leasehold property in Shrewton depends on how many years the lease has remaining. If it is near to or less than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be concluded prior to the eighty year cut off point. Current legislation enables Shrewton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Engaging our service will provide you better control over the value of your Shrewton leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Joshua was the the leasehold proprietor of a 2 bedroom flat in Shrewton on the market with a lease of a few days over fifty eight years unexpired. Joshua informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Joshua to invoke his statutory right. Joshua procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2009 we were approached by Mr and Mrs. N Hall who, having acquired a one bedroom apartment in Shrewton in July 1997. The dilemma was if we could estimate the price would be to extend the lease by an additional years. Comparable flats in Shrewton with an extended lease were valued about £210,000. The average amount of ground rent was £50 billed quarterly. The lease ended in 2106. Given that there were 80 years remaining we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of costs.
Last Christmas we were e-mailed by Mr and Mrs. I Roberts , who purchased a basement apartment in Shrewton in May 2009. The dilemma was if we could approximate the price would be to prolong the lease by a further 90 years. Similar flats in Shrewton with a long lease were in the region of £280,000. The average ground rent payable was £45 billed yearly. The lease elapsed in 2095. Considering the 69 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.