Chadderton 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 the lease gets more expensive. Most 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 would be well advised to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty 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 premises in Chadderton with in excess of 100 years remaining on the lease are often 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 purchasing the reversionary interest unless savings on ground rent and service charges warrant 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; |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Lease extensions in Chadderton can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor 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 Chadderton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Elijah was the the leasehold owner of a studio apartment in Chadderton on the market with a lease of a little over sixty years remaining. Elijah informally contacted his landlord a well known local-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Elijah to exercise his statutory right. Elijah obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Mrs Natalie Anderson moved into a studio flat in Chadderton in May 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Chadderton with 100 year plus lease were in the region of £200,800. The average amount of ground rent was £65 billed per annum. The lease came to a finish on 8 April 2085. Taking into account 60 years left we estimated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of legals.
In 2011 we were phoned by Dr Benjamin Young who, having moved into a newly refurbished flat in Chadderton in September 2011. The dilemma was if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable residencies in Chadderton with a long lease were valued about £260,000. The mid-range amount of ground rent was £50 collected per annum. The lease concluded on 4 January 2096. Having 71 years unexpired we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.