Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Chantry. Inevitably, the term of lease remaining reduces as time goes by. This may slip by relatively unnoticed when the flat or house has to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Eligible long lease owners in Chantry have the legal entitlement to extend the lease for a further ninety years under statute. Do give careful consideration before delaying your Chantry lease extension. Holding off that expense now likely increases the price you will ultimately incur to extend your lease
Leasehold premises in Chantry with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Chantry,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 experience and the close ties they enjoy with Chantry valuers.
In recent months Seth, came very close to the 80-year threshold with the lease on his ground floor apartment in Chantry. In buying his home two decades ago, the unexpired term was of no significance. Luckily, he became aware that he would soon be paying way over the odds for a lease extension. Seth arranged for a lease extension just ahead of time in August. Seth and the landlord in the end settled on sum of £5,500 . If the lease had descended to less than eighty years, the premium would have increased by at least £1,150.
In 2010 we were phoned by Mr Luke Hill who, having purchased a recently refurbished flat in Chantry in April 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Comparative flats in Chantry with 100 year plus lease were in the region of £260,000. The average ground rent payable was £50 billed annually. The lease elapsed on 10 November 2098. Taking into account 72 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.
Dr Harrison Laurent bought a purpose-built flat in Chantry in January 2009. The question was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Identical homes in Chantry with a long lease were valued around £261,600. The average amount of ground rent was £60 invoiced quarterly. The lease end date was on 8 February 2078. Given that there were 52 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of costs.