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 gets more expensive. Legislation has been in place for sometime now which entitles qualifying Shadwell residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Shadwell you must check if your lease has between seventy 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 will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service gives you better 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 lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Caleb, started to get close to the 80-year mark with the lease on his ground floor apartment in Shadwell. In buying his property 18 years previously, the unexpired term was of minimal importance. Luckily, he became aware that he needed to take steps soon on Extending the lease. Caleb was able to extend his lease at the eleventh hour in June. Caleb and the freeholder via the management company subsequently settled on the final figure of £5,000 . If the lease had dropped to less than eighty years, the premium would have gone up by a minimum £925.
Last Spring we were contacted by Mr and Mrs. A Nelson , who bought a first floor apartment in Shadwell in February 1997. The dilemma was if we could estimate the price would likely be for a 90 year extension to my lease. Similar homes in Shadwell with 100 year plus lease were in the region of £174,200. The mid-range ground rent payable was £55 collected annually. The lease ended on 10 January 2076. Taking into account 51 years left we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 not including legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Shadwell premises 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 affected 3 flats. The unexpired lease term was 101.61 years.