When it comes to residential leasehold premises in Shoreditch, you effectively rent it for a certain amount of time. In recent years 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 extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years left. Anyone in Shoreditch with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. Once a lease has below eighty years left, under the relevant Act the freeholder can calculate and charge a larger premium, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Shoreditch,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Shoreditch valuers.
In 2014 Edward, came seriously close to the 80-year mark with the lease on his basement flat in Shoreditch. In buying his home 19 years previously, the length of the lease was of minimal importance. As luck would have it, he became aware that he would imminently be paying an escalated premium for a lease extension. Edward arranged for a lease extension at the eleventh hour in July. Edward and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If he had missed the deadline, the premium would have escalated by a minimum £1,000.
Last Spring we were e-mailed by Dr Kai Thompson , who acquired a recently refurbished apartment in Shoreditch in September 2009. We are asked if we could approximate the premium would likely be to extend the lease by ninety years. Identical flats in Shoreditch with an extended lease were in the region of £280,000. The average amount of ground rent was £45 collected annually. The lease came to a finish in 2095. Given that there were 70 years unexpired we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.
An example of a Lease Extension decision for a Shoreditch premises 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 unexpired residue of the current lease was 72.39 years.