Chinatown leases on residential properties are gradually decreasing 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 Chinatown enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Chinatown you would be well advised to check if your lease has between seventy and 90 years left. There are good reasons why a Chinatown leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is effected without delay
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Chinatown can be a difficult process. We recommend you get guidance from a lawyer 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 Chinatown lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After lengthy discussions with the freeholder of her garden flat in Chinatown, Madeleine commenced the lease extension process just as the lease was approaching the crucial eighty-year threshold. The lease extension was finalised in February 2008. The landlord’s charges were kept to an absolute minimum.
In 2013 we were approached by Dr R Brown who, having bought a newly refurbished apartment in Chinatown in January 1995. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar homes in Chinatown with a long lease were worth £216,000. The average ground rent payable was £60 collected every twelve months. The lease concluded on 24 June 2084. Taking into account 58 years remaining we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Chinatown property 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 remaining number of years on the lease was 73.92 years.