Cheam 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 Cheam enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Cheam you would be well advised to check if your lease has between seventy and ninety years left. There are compelling reasons why a Cheam leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold properties in Cheam with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Cheam,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cheam valuers.
16 months ago Evan, started to get close to the 80-year mark with the lease on his first floor apartment in Cheam. In buying his home two decades ago, the unexpired term was of no interest. Thankfully, he became aware that he would imminently be paying an escalated premium for a lease extension. Evan arranged for a lease extension just under the wire in March. Evan and the landlord ultimately settled on a premium of £6,000 . If the lease had slid to less than eighty years, the figure would have escalated by a minimum £1,125.
In 2013 we were called by Dr O Taylor who, having took over the lease of a ground floor apartment in Cheam in March 2005. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar premises in Cheam with 100 year plus lease were valued around £243,000. The mid-range amount of ground rent was £65 billed quarterly. The lease terminated in 2087. Considering the 63 years left we estimated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of expenses.
An example of a Lease Extension case for a Cheam premises is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case was in relation to 1 flat. The unexpired term was 60.43 years.