Shoreditch leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Shoreditch residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Shoreditch you should check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Shoreditch flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
|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.|
|Godiva Mortgages||A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion.|
|Leeds Building Society||85 years remaing from the start of the mortgage.|
|National Westminster Bank|| Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.|
|TSB||Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.|
Lease extensions in Shoreditch can be a difficult process. We recommend you procure professional help from a lawyer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Shoreditch lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Joshua owned a 2 bedroom flat in Shoreditch on the market with a lease of just over 61 years outstanding. Joshua on an informal basis spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Joshua to invoke his statutory right. Joshua procured expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were contacted by Mrs Millie Nelson who, having acquired a basement apartment in Shoreditch in March 1997. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Comparative residencies in Shoreditch with a long lease were valued about £205,000. The average ground rent payable was £50 billed monthly. The lease expiry date was in 2100. Taking into account 79 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus legals.
An example of a Lease Extension decision 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 related to 2 flats. The unexpired term was 72.39 years.