If you are facing a significant premium because your lease in Shillington has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Shillington lease extension today:
A Shillington leasehold property depreciates with the years remaining on the lease.
Owning a apartment usually means owning a lease of the property, which has a set term of years. your lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Shillington. Inevitably, the term of lease remaining shortens over time. This may pass by relatively unnoticed when the flat or house needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Shillington have the legal entitlement to extend the lease for a further ninety years under statute. You should give careful consideration before delaying your Shillington lease extension. Holding off that expense now simply increases the price you will ultimately incur to extend your lease
An extended lease has roughly the same value as a freehold
Leasehold premises in Shillington with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
Lending institutions will not loan monies on a short lease
Nearly all mortgage lenders insist on a lengthy amount of time remaining on any leasehold property before they will contemplate lending on it. Regardless of whether you require a mortgage, you should keep in mind that it is reasonable to assume that someone wishing to purchase your property in the future might well do, so where they are unable to secure a mortgage, then the market price of the property could be adversely impacted. Since 2008 most mortgage lenders have increased the required minimum lease length that they are prepared to lend on
| Lender |
Requirement
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|---|
| 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;
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| Santander |
If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. 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.
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.
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| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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Why use us for your lease extension in Shillington?
Lease extensions in Shillington can be a difficult process. We recommend you get guidance from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Shillington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Shillington Lease Extension Example Cases:
Milo, Shillington, Bedfordshire
Twenty four months ago Milo, started to get near to the eighty-year mark with the lease on his leasehold apartment in Shillington. Having purchased his flat two decades ago, the unexpired term was of little bearing. Luckily, he noticed he needed to take action soon on a lease extension. Milo was able to extend his lease at the eleventh hour in May. Milo and the freeholder eventually settled on an amount of £5,500 . If he had missed the deadline, the figure would have increased by a minimum £1,050.
Shillington case:
In 2009 we were contacted by Dr Joshua Watson who, having bought a first floor apartment in Shillington in July 2004. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Similar homes in Shillington with 100 year plus lease were valued about £216,000. The mid-range ground rent payable was £60 collected quarterly. The lease came to a finish on 4 March 2084. Given that there were 58 years outstanding we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including professional charges.
Shillington case:
Mr and Mrs. U Nelson was assigned a lease of a basement flat in Shillington in April 1996. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparable residencies in Shillington with an extended lease were in the region of £205,000. The mid-range amount of ground rent was £50 billed annually. The lease expired on 14 October 2105. Having 79 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £7,600 and £8,800 exclusive of legals.