When it comes to residential leasehold property in Shoreditch, you are actually purchasing a right to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly once there are fewer than 80 years left. Anyone in Shoreditch with a lease nearing 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has fewer than 80 years outstanding, under the current statute the freeholder is entitled to calculate and levy a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is generally accepted that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Shoreditch,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 Shoreditch valuers.
Subsequent to protracted correspondence with the landlord of her studio flat in Shoreditch, Rhiannon commenced the lease extension process as the eighty year mark was fast advancing. The legal work completed in June 2012. The landlord’s fees were kept to an absolute minimum.
Last Christmas we were approach by Dr C Allen , who owned a recently refurbished flat in Shoreditch in January 2003. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparative homes in Shoreditch with 100 year plus lease were worth £198,800. The average ground rent payable was £55 invoiced monthly. The lease finished in 2081. Considering the 55 years remaining we estimated the premium to the landlord to extend the lease to be between £33,300 and £38,400 not including legals.
An example of a Lease Extension matter before the tribunal for a Shoreditch flat is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case affected 2 flats. The number of years remaining on the existing lease(s) was 72.39 years.