For anyone whose Shadwell property is held on a long lease, our message is clear – if nothing is done, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension.
Leasehold properties in Shadwell with more than one hundred years left 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 home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a landlord in Shadwell,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shadwell valuers.
Half a year ago Tyler, came dangerously near to the 80-year threshold with the lease on his first floor apartment in Shadwell. In buying his property two decades ago, the length of the lease was of minimal importance. Fortunately, it dawned on him that he would soon be paying an inflated amount for a lease extension. Tyler extended the lease just ahead of time in June. Tyler and the landlord in the end settled on a premium of £5,000 . If he had missed the deadline, the sum would have increased by a minimum £1,075.
In 2009 we were e-mailed by Mr and Mrs. E Ali who, having moved into a one bedroom flat in Shadwell in November 2005. The question was if we could estimate the premium would be to extend the lease by 90 years. Comparable flats in Shadwell with 100 year plus lease were in the region of £166,800. The mid-range ground rent payable was £50 collected every twelve months. The lease elapsed in 2076. Given that there were 50 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.
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 term as at the valuation date was 101.61 years.