Unfortunately that a Chalk Farm residential lease is a wasting 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 loss of value being disguised by increases in the Chalk Farm property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Chalk Farm will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Chalk Farm with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 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. |
The lawyers that we work with undertake Chalk Farm lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Callum owned a conversion flat in Chalk Farm being sold with a lease of a few days over 61 years outstanding. Callum on an informal basis approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Callum to exercise his statutory right. Callum procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
In 2009 we were approached by Dr Charlotte Hill who, having acquired a one bedroom apartment in Chalk Farm in February 2010. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative premises in Chalk Farm with an extended lease were valued about £275,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease elapsed on 4 February 2093. Taking into account 68 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of costs.
An example of a Lease Extension decision for a Chalk Farm flat is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case affected 1 flat. The remaining number of years on the lease was 64.77 years.