If you are facing a significant premium because your lease in Shepherd's Bush has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Shepherd's Bush lease extension today:
Increase your lease and increase your Shepherd's Bush property value
Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will normally be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Shepherd's Bush. Inevitably, the period of lease remaining reduces over time. This may pass by relatively unnoticed when the residence needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in Shepherd's Bush have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Do give due consideration before putting off your Shepherd's Bush lease extension. Holding off that expense now simply increases the price you will eventually have to pay to extend your lease
Shepherd's Bush property with a lease extension is almost the same value as a freehold
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
Lending institutions will not lend on a short lease
Mortgage lenders are less likely to give a loan offer on a residential property in Shepherd's Bush with a short lease. Many lenders simply refuse a mortgage on leases with below 75 years remaining.
| Lender |
Requirement
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|---|
| 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.
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| 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.
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| 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.
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| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Shepherd's Bush?
Regardless of whether you are a tenant or a landlord in Shepherd's Bush,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Shepherd's Bush valuers.
Shepherd's Bush Lease Extension Case Studies:
Freddie, Shepherd's Bush, West London,
Freddie owned a studio apartment in Shepherd's Bush on the market with a lease of just over fifty eight years remaining. Freddie on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Shepherd's Bush case:
Last Summer we were contacted by Mr and Mrs. O Vincent , who
took over the lease of a purpose-built apartment in Shepherd's Bush in July 2000. We are asked if we could estimate the price could be for a 90 year lease extension. Similar homes in Shepherd's Bush with an extended lease were valued around £267,600. The average amount of ground rent was £65 invoiced every twelve months. The lease ended in 2093. Having 67 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £14,300 and £16,400 plus professional charges.
Decision in Hammersmith and Fulham
An example of a Freehold Enfranchisement matter before the tribunal for a Shepherd's Bush residence is
82 Minford Gardens in February 2009. The Tribunal determined that the enfranchisement price was £37,341
This case was in relation to 2 flats. The remaining number of years on the lease was 72.92 years.