Chadderton 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 your lease gets more expensive. The majority of owners of residential leasehold property in Chadderton enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Chadderton you really ought to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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; |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Chadderton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In 2014 Elijah, came perilously close to the 80-year mark with the lease on his garden apartment in Chadderton. Having bought his property 18 years previously, the length of the lease was of little significance. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Elijah extended the lease at the eleventh hour in August. Elijah and the freeholder ultimately agreed on a premium of £5,000 . If the lease had slid below 80 years, the premium would have gone up by at least £1,075.
Mr I Dupont completed a garden flat in Chadderton in July 2007. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparative flats in Chadderton with an extended lease were in the region of £200,800. The average ground rent payable was £65 billed monthly. The lease expiry date was on 2 April 2086. Considering the 60 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of expenses.
Mr and Mrs. L Moore owned a garden flat in Chadderton in July 2008. The question was if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Identical properties in Chadderton with a long lease were valued around £255,000. The average ground rent payable was £50 invoiced per annum. The lease ended in 2097. Taking into account 71 years remaining we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.