Unfortunately that a Chingford residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Chingford property market.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Chingford will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Chingford,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Chingford valuers.
In recent months Jackson, started to get close to the 80-year mark with the lease on his first floor apartment in Chingford. Having purchased his home two decades ago, the lease term was of minimal significance. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. Jackson extended the lease just in the nick of time last August. Jackson and the landlord in the end agreed on a premium of £6,000 . If the lease had dipped to less than eighty years, the price would have gone up by at least £950.
In 2014 we were approached by Ms Zoe Richardson who, having purchased a newly refurbished apartment in Chingford in February 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparable residencies in Chingford with a long lease were in the region of £242,600. The average ground rent payable was £45 collected annually. The lease concluded on 18 August 2092. Taking into account 67 years left we approximated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 not including professional charges.
An example of a Freehold Enfranchisement decision for a Chingford flat 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 affected 2 flats. The unexpired lease term was 69.26 years.