Shoreditch leases on residential properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Shoreditch will mostly qualify for a lease extension; however It would be wise to check with a lawyer to check your eligibility. In some situations you may not qualify. There are also strict deadlines and steps to comply with once the process is initiated so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Shoreditch can be a difficult process. We recommend you obtain guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Shoreditch lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Tyler, started to get close to the eighty-year threshold with the lease on his garden flat in Shoreditch. Having purchased his home two decades ago, the length of the lease was of little concern. by good luck, he became aware that he needed to take action soon on Extending the lease. Tyler was able to extend his lease just under the wire last August. Tyler and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If the lease had dropped lower than 80 years, the sum would have increased by a minimum £1,050.
Dr Niamh Rivera bought a studio apartment in Shoreditch in January 2011. The question was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative homes in Shoreditch with 100 year plus lease were valued around £295,000. The average ground rent payable was £45 invoiced every twelve months. The lease came to a finish on 28 June 2099. Taking into account 74 years unexpired we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.
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 affected 2 flats. The remaining number of years on the lease was 72.39 years.