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Why you should commence your Shadwell lease extension


Top reasons for lease extension now:

Increase your lease and increase your Shadwell property value

Shadwell leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Shadwell residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Shadwell you would be well advised to check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value

An extended lease has roughly the same value as a freehold

It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for decades to come.

Banks and Building Societies will not issue a mortgage with a short lease

Lenders do not like short residential leases. You are likely to experience problems where you want to sell your flat in Shadwell if the remaining lease term is under the criteria set by most lenders. Different lenders have varying requirements but on the whole they are looking for an unexpired term of at least seventy years.

Lender Requirement
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
Royal Bank of Scotland Mortgage term plus 30 years.
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.

What makes us experts in Shadwell lease extensions?

The conveyancing solicitors that we work with procure Shadwell lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.

Shadwell Lease Extension Case Summaries:

James, Shadwell, Leeds

During the course of the last few months James, came critically near to the eighty-year threshold with the lease on his two bedroom flat in Shadwell. Having purchased his home twenty years previously, the length of the lease was of minimal concern. Luckily, it dawned on him that he needed to take action soon on Extending the lease. James extended the lease just under the wire last April. James and the freeholder via the management company ultimately agreed on an amount of £6,000 . If the lease had gone lower than eighty years, the sum would have become more exhorbitant by a minimum £1,125.

Shadwell case:

Last Spring we were contacted by Mr E André , who acquired a ground floor apartment in Shadwell in February 2008. The dilemma was if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable residencies in Shadwell with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 invoiced annually. The lease expired in 2097. Given that there were 72 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of legals.

Decision in Southwark

An example of a Freehold Enfranchisement decision 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 related to 3 flats. The unexpired term as at the valuation date was 101.61 years.