Chigwell leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Chigwell tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Chigwell you would be well advised to check if your lease has between 70 and ninety years remaining. There are good reasons why a Chigwell leaseholder with a lease having around 80 years unexpired should take steps to ensure that a lease extension is put in place without delay
Leasehold properties in Chigwell with over one hundred years outstanding on the lease are sometimes referred to as ‘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 upside in buying the freehold unless savings on ground rent and service charges warrant 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. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Chigwell can be a difficult process. We recommend you secure professional help from a conveyancer and valuer with experience in lease extensions.
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 in-depth market knowledge dealing with Chigwell lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Subsequent to lengthy negotiations with the landlord of her purpose-built flat in Chigwell, Lily started the lease extension process as the eighty year threshold was quickly approaching. The legal work completed in April 2010. The landlord’s costs were kept to an absolute minimum.
In 2011 we were e-mailed by Ms U Miller who, having moved into a one bedroom apartment in Chigwell in June 1997. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar properties in Chigwell with an extended lease were worth £290,000. The average ground rent payable was £60 collected annually. The lease elapsed in 2105. Considering the 80 years remaining we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 plus professional charges.
An example of a Freehold Enfranchisement case for a Chigwell premises is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The unexpired term as at the valuation date was 69.26 years.