Shepherd's Bush leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Shepherd's Bush residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Shepherd's Bush you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Shepherd's Bush with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Shepherd's Bush leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Nathaniel, started to get close to the 80-year threshold with the lease on his purpose- built apartment in Shepherd's Bush. Having bought his property two decades ago, the unexpired term was of little concern. by good luck, he recognised he needed to take action soon on a lease extension. Nathaniel was able to extend his lease just under the wire in April. Nathaniel and the freeholder via the managing agents subsequently settled on a premium of £5,500 . If he not met the deadline, the premium would have increased by at least £1,100.
Ms Rachel Harris owned a one bedroom flat in Shepherd's Bush in May 1997. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparable residencies in Shepherd's Bush with 100 year plus lease were valued around £275,000. The mid-range amount of ground rent was £65 invoiced monthly. The lease termination date was in 2093. Having 68 years unexpired we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Shepherd's Bush premises is 82 Minford Gardens in February 2009. The Tribunal determined that the enfranchisement price was £37,341 This case related to 2 flats. The unexpired term as at the valuation date was 72.92 years.