Cheam leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Cheam enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Cheam you should check if your lease has between seventy and ninety years left. There are compelling reasons why a Cheam flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Using our service gives you better control over the value of your Cheam leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Eliot, started to get near to the eighty-year mark with the lease on his garden flat in Cheam. Having bought his flat two decades ago, the unexpired term was of minimal concern. Fortunately, he realised he needed to take action soon on Extending the lease. Eliot was able to extend his lease just in the nick of time in January. Eliot and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If the lease had slid below 80 years, the price would have escalated by at least £1,125.
In 2011 we were approached by Mr and Mrs. E Vincent who, having acquired a basement apartment in Cheam in August 1999. We are asked if we could estimate the premium would be to extend the lease by an additional years. Comparable premises in Cheam with 100 year plus lease were in the region of £189,000. The average ground rent payable was £55 collected annually. The lease concluded on 22 March 2079. Having 53 years left we estimated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus legals.
An example of a Lease Extension matter before the tribunal for a Cheam premises is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case related to 1 flat. The unexpired term as at the valuation date was 60.43 years.