The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Chinatown can extend the lease for a further 90 years under Leasehold Reform legislation. Do think carefully before delaying your Chinatown lease extension. Shelving the costs now simply increases the premium you will eventually be required to pay to extend the lease.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for decades to come.
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; |
Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
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. |
National Westminster Bank | Mortgage term plus 30 years. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you better control over the value of your Chinatown leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Connor, came dangerously close to the eighty-year mark with the lease on his ground floor flat in Chinatown. Having bought his flat two decades ago, the lease term was of little bearing. Fortunately, he recognised he would imminently be paying an escalated premium for Extending the lease. Connor arranged for a lease extension just under the wire in June. Connor and the landlord subsequently agreed on the final figure of £6,000 . If he had missed the deadline, the premium would have gone up by a minimum £1,150.
Mr and Mrs. V Davies took over the lease of a one bedroom apartment in Chinatown in April 2000. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar properties in Chinatown with 100 year plus lease were valued around £250,400. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease expiry date was in 2089. Considering the 64 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Chinatown residence is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case affected 2 flats. The unexpired term as at the valuation date was 73.92 years.