Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Shoreditch. Clearly, the length of lease left shortens as time goes by. This may pass by relatively unnoticed when the property has to be sold or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension. Qualifying long lease owners in Shoreditch have the legal entitlement to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Do give careful deliberation before delaying your Shoreditch lease extension. Putting off the cost now only increases the price you will eventually have to pay to extend your lease
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service gives you better control over the value of your Shoreditch leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Kyle, came seriously close to the 80-year threshold with the lease on his ground floor flat in Shoreditch. In buying his home twenty years ago, the lease term was of minimal significance. Thankfully, he recognised he would soon be paying an inflated amount for a lease extension. Kyle was able to extend his lease just under the wire in March. Kyle and the freeholder subsequently agreed on sum of £5,500 . If the lease had slipped below 80 years, the figure would have become more costly by at least £1,000.
Last May we were phoned by Dr W Stewart , who owned a one bedroom apartment in Shoreditch in August 2004. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative flats in Shoreditch with an extended lease were valued about £233,200. The average ground rent payable was £60 collected annually. The lease expired in 2085. Having 61 years unexpired we estimated the premium to the freeholder to extend the lease to be within £22,800 and £26,400 exclusive of professional charges.
An example of a Lease Extension case for a Shoreditch property is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The number of years remaining on the existing lease(s) was 72.39 years.