With a long leasehold premises in Shadwell, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than eighty years remaining. Leasehold owners in Shadwell with a lease drawing near to 81 years unexpired should seriously consider extending it sooner rather than later. Once the lease term has fewer than 80 years outstanding, under the current statute the freeholder can calculate and levy a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Shadwell,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shadwell valuers.
Oscar owned a 2 bedroom apartment in Shadwell being sold with a lease of fraction over sixty years remaining. Oscar informally contacted his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Oscar to exercise his statutory right. Oscar procured expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
Last Summer we were called by Mr and Mrs. A Edwards , who bought a ground floor apartment in Shadwell in September 2007. The question was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Identical homes in Shadwell with 100 year plus lease were valued around £210,000. The mid-range amount of ground rent was £50 collected yearly. The lease ran out on 26 October 2105. Having 80 years remaining we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus expenses.
An example of a Freehold Enfranchisement decision for a Shadwell premises is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case was in relation to 3 flats. The remaining number of years on the lease was 101.61 years.