When it comes to long leasehold premises in Cheam, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially when there are fewer than eighty years left. Anyone in Cheam with a lease nearing 81 years remaining should seriously consider extending it sooner as opposed to later. Once a lease has under 80 years remaining, under the current statute the landlord is entitled to calculate and charge a greater premium, based on a technical computation, known as “marriage value” which is payable.
Leasehold premises in Cheam with more than 100 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Cheam,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cheam valuers.
Nathaniel owned a 2 bedroom apartment in Cheam being sold with a lease of a little over fifty eight years left. Nathaniel on an informal basis approached his landlord a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Nathaniel to invoke his statutory right. Nathaniel procured expert advice and secured an acceptable deal informally and sell the flat.
Last Spring we were called by Mr B Davis , who took over the lease of a purpose-built flat in Cheam in October 1995. We are asked if we could estimate the price could be for a 90 year lease extension. Similar premises in Cheam with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 collected every twelve months. The lease expired on 27 April 2095. Given that there were 69 years remaining we estimated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.
An example of a Lease Extension decision for a Cheam property 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 affected 1 flat. The unexpired residue of the current lease was 60.43 years.