Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Shadwell. Inevitably, the length of lease left shortens over time. This is often overlooked and only raises itself as an issue when the property needs to be disposed of 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. Qualifying long lease owners in Shadwell have the legal entitlement to extend the lease for an additional ninety years under legislation. Please give due deliberation before putting off your Shadwell lease extension. Holding off the cost now simply increases the price you will eventually incur to extend your lease
Leasehold properties in Shadwell with more than 100 years outstanding 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 property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant 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. |
| 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. |
| 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. |
Engaging our service gives you increased control over the value of your Shadwell leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Gabriel, came perilously close to the 80-year mark with the lease on his studio flat in Shadwell. Having bought his home 18 years ago, the length of the lease was of no bearing. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Gabriel was able to extend his lease just ahead of time in July. Gabriel and the freeholder via the managing agents ultimately agreed on the final figure of £5,000 . If the lease had dropped below 80 years, the price would have escalated by at least £875.
In 2014 we were approached by Mr and Mrs. N Bailey who, having took over the lease of a purpose-built apartment in Shadwell in May 1995. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar residencies in Shadwell with 100 year plus lease were valued about £205,000. The mid-range ground rent payable was £50 billed per annum. The lease elapsed in 2105. Taking into account 79 years left we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus 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 was in relation to 3 flats. The unexpired residue of the current lease was 101.61 years.