Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Shepherd's Bush. Clearly, the term of lease remaining shortens over time. This is often ignored and only raises itself as an issue when the flat or house needs to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Shepherd's Bush have the legal entitlement to extend the lease for a further ninety years under statute. Do give due attention before putting off your Shepherd's Bush lease extension. Holding off the cost now likely increases the price you will ultimately have to pay for a lease extension
Leasehold properties in Shepherd's Bush with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Shepherd's Bush 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.
Two years ago Sam, came precariously close to the eighty-year threshold with the lease on his two bedroom apartment in Shepherd's Bush. In buying his home two decades ago, the unexpired term was of little concern. Luckily, he recognised he needed to take action soon on a lease extension. Sam was able to extend his lease at the eleventh hour last August. Sam and the landlord who owned the flat above ultimately agreed on sum of £5,000 . If he not met the deadline, the amount would have become more exhorbitant by at least £1,150.
In 2013 we were contacted by Mr J Laurent who, having acquired a newly refurbished apartment in Shepherd's Bush in March 1997. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Similar flats in Shepherd's Bush with a long lease were valued about £174,200. The average ground rent payable was £55 billed yearly. The lease lapsed on 8 September 2076. Given that there were 51 years remaining we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 not including legals.
An example of a Freehold Enfranchisement case for a Shepherd's Bush flat is 82 Minford Gardens in February 2009. The Tribunal determined that the enfranchisement price was £37,341 This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 72.92 years.