Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Shadwell. Inevitably, the length of lease left reduces over time. This may pass by relatively unnoticed 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 it will cost to procure a lease extension. Eligible leaseholders in Shadwell have the legal entitlement to extend the lease for a further ninety years under legislation. You should give due attention before putting off your Shadwell lease extension. Putting off that expense now simply increases the price you will eventually incur for a lease extension
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property 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. |
| Chelsea 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Shadwell,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shadwell valuers.
Last October Dylan, came seriously near to the eighty-year threshold with the lease on his one bedroom flat in Shadwell. Having bought his home two decades ago, the lease term was of minimal significance. Fortunately, he noticed he would imminently be paying way over the odds for Extending the lease. Dylan extended the lease at the eleventh hour in June. Dylan and the freeholder via the managing agents in the end settled on a premium of £5,000 . If he had missed the deadline, the sum would have become more exhorbitant by a minimum £1,050.
Mr R Martínez completed a purpose-built apartment in Shadwell in September 2000. The question was if we could approximate the premium would be to extend the lease by a further 90 years. Similar residencies in Shadwell with 100 year plus lease were worth £210,000. The average ground rent payable was £50 collected yearly. The lease terminated in 2106. Considering the 80 years outstanding we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 not including costs.
An example of a Freehold Enfranchisement case for a Shadwell residence 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 related to 3 flats. The remaining number of years on the lease was 101.61 years.