Shrewton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Shrewton tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Shrewton you should investigate if your lease has between 70 and 90 years remaining. There are compelling reasons why a Shrewton leaseholder with a lease having around eighty years left should take action to ensure that a lease extension is put in place without delay
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake 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 lawyer we work with provide it.
Last year Elijah, started to get near to the 80-year mark with the lease on his garden apartment in Shrewton. Having purchased his home twenty years ago, the lease term was of minimal relevance. Thankfully, he noticed he would imminently be paying way over the odds for Extending the lease. Elijah was able to extend his lease just ahead of time last May. Elijah and the freeholder via the management company subsequently agreed on a premium of £6,000 . If the lease had gone lower than 80 years, the premium would have gone up by a minimum £850.
In 2011 we were contacted by Mr Thomas Rivera who, having owned a studio flat in Shrewton in July 2008. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar properties in Shrewton with 100 year plus lease were worth £233,200. The average amount of ground rent was £60 invoiced quarterly. The lease expired on 27 August 2087. Taking into account 61 years left we approximated the premium to the landlord for the lease extension to be between £22,800 and £26,400 plus fees.
Last Christmas we were contacted by Mr and Mrs. R Green , who completed a purpose-built flat in Shrewton in June 2007. We are asked if we could estimate the price could be to extend the lease by an additional years. Comparable homes in Shrewton with 100 year plus lease were in the region of £171,800. The mid-range ground rent payable was £55 collected every twelve months. The lease ended on 5 June 2076. Given that there were 50 years outstanding we calculated the premium to the landlord to extend the lease to be within £33,300 and £38,400 plus professional charges.