Shadwell 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 becomes more expensive. It is the case that most Shadwell 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 Shadwell you should investigate if your lease has between seventy and 90 years left. There are good reasons why a Shadwell leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Shadwell with more than 100 years remaining 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 premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Using our service gives you enhanced control over the value of your Shadwell leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Edward owned a conversion apartment in Shadwell being marketed with a lease of fraction over 59 years remaining. Edward informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward procured expert advice and secured an acceptable deal without going to tribunal and readily saleable.
Last Winter we were called by Mr and Mrs. J Mason , who purchased a purpose-built apartment in Shadwell in April 2004. The question was if we could estimate the price would be to extend the lease by ninety years. Identical properties in Shadwell with 100 year plus lease were valued about £200,000. The mid-range amount of ground rent was £50 billed annually. The lease expired on 5 March 2103. Taking into account 77 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Shadwell flat 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 affected 3 flats. The remaining number of years on the lease was 101.61 years.