Why you should commence your Cheam lease extension

Why you should commence your Cheam lease extension today:

A Cheam lease depreciates with the years remaining on the lease.

Cheam 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 the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cheam residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Cheam you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value

Cheam property with a lease extension has roughly the same value as a freehold

Leasehold premises in Cheam with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.

Lending institutions may not finance a property on a short lease

The trend since over the last decade has been for mortgage companies to tighten lending requirements across the board - this has extended to the types of security over which the home loan is to be granted. This has resulted in the minimum number of years remaining under the lease required by mortgage companies has increased. In the past banks would lend on a lease with 25 years plus the term of the loan - typically 50 year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many now have a minimum term of 75 years as a prerequisite.

Get in touch with one of our Cheam lease extension solicitors or enfranchisement solicitors

Lease extensions in Cheam can be a difficult process. We recommend you secure guidance from a conveyancer and valuer with experience in lease extensions.

We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Cheam lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Cheam Lease Extension Example Cases:

Isaac, Cheam, South London

In 2014 Isaac, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Cheam. In buying his flat two decades ago, the lease term was of little concern. Fortunately, he noticed he needed to take action soon on Extending the lease. Isaac arranged for a lease extension at the eleventh hour in January. Isaac and the landlord who owned the flat above subsequently agreed on a premium of £6,000 . If he not met the deadline, the sum would have escalated by a minimum £975.

Cheam case:

In 2013 we were approached by Ms Ashleigh Walker who, having was assigned a lease of a first floor flat in Cheam in September 2005. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Identical flats in Cheam with 100 year plus lease were valued about £295,000. The mid-range amount of ground rent was £45 collected monthly. The lease concluded on 13 March 2100. Taking into account 74 years left we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.