Shoreditch leases on residential properties are gradually diminishing 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. The majority of owners of residential leasehold property in Shoreditch enjoy rights under legislation to extend the terms of their leases. Where 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 eighty years left should take steps to ensure that a lease extension is put in place without delay
Leasehold premises in Shoreditch with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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 |
Engaging our service gives you increased control over the value of your Shoreditch leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy correspondence with the landlord of her first floor flat in Shoreditch, Grace initiated the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work completed in October 2010. The freeholder’s costs were kept to an absolute minimum.
Mr Callum Bailey owned a one bedroom flat in Shoreditch in September 1998. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Identical premises in Shoreditch with 100 year plus lease were valued around £233,200. The average amount of ground rent was £60 billed monthly. The lease came to a finish in 2087. Given that there were 61 years outstanding we approximated the premium to the landlord to extend the lease to be within £22,800 and £26,400 not including fees.
An example of a Lease Extension decision for a Shoreditch property 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 unexpired lease term was 72.39 years.