The market value of a leasehold property in Chalk Farm is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the lease extension process when the lease still has 82 years to run so that formalities can be addressed ahead of the 80 year mark. Current legislation enables Chalk Farm qualifying lessees to an additional term of 90 years on top of the existing term, at a nominal rent (no ground rent). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Coventry Building Society | 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. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure 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.
14 months ago Evan, came precariously close to the 80-year mark with the lease on his studio apartment in Chalk Farm. Having purchased his property two decades ago, the length of the lease was of minimal interest. Luckily, it dawned on him that he needed to take action soon on Extending the lease. Evan was able to extend his lease just under the wire last March. Evan and the landlord who owned the flat above eventually agreed on the final figure of £6,000 . If the lease had slid below eighty years, the premium would have escalated by a minimum £1,000.
In 2010 we were approached by Mr and Mrs. O Clark who, having acquired a ground floor apartment in Chalk Farm in February 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Identical residencies in Chalk Farm with 100 year plus lease were valued about £260,200. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 1 September 2092. Given that there were 66 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of legals.
An example of a Lease Extension case for a Chalk Farm residence 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 related to 1 flat. The unexpired lease term was 64.77 years.