Chapeltown leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Chapeltown residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Chapeltown you should see if your lease has between 70 and 90 years remaining. There are good reasons why a Chapeltown flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is effected without delay
Leasehold residencies in Chapeltown with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Chapeltown,the lease extension solicitors 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 Chapeltown valuers.
Harvey owned a conversion flat in Chapeltown being sold with a lease of a few days over 72 years left. Harvey informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Harvey to exercise his statutory right. Harvey obtained expert legal guidance and secured satisfactory deal informally and sell the flat.
Last Autumn we were e-mailed by Mrs F Norbert , who moved into a purpose-built apartment in Chapeltown in September 2008. We are asked if we could approximate the premium would be for a ninety year lease extension. Similar flats in Chapeltown with a long lease were worth £260,200. The average ground rent payable was £65 billed monthly. The lease lapsed in 2092. Considering the 66 years remaining we calculated the premium to the landlord for the lease extension to be within £15,200 and £17,600 plus costs.
Mr Joseph Lee took over the lease of a newly refurbished flat in Chapeltown in March 2010. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparative properties in Chapeltown with 100 year plus lease were in the region of £198,800. The average ground rent payable was £55 invoiced per annum. The lease finished in 2081. Given that there were 55 years outstanding we approximated the premium to the landlord to extend the lease to be between £33,300 and £38,400 plus legals.