There is no doubt about it a leasehold property in Chinatown is a wasting asset as a result of the shortening lease. If the lease has, in excess of one hundred years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease without delay. The majority of flat owners in Chinatown will qualify for this right; however a conveyancer will be able to confirm whether you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold properties in Chinatown with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Lease extensions in Chinatown can be a difficult process. We recommend you procure professional help from a conveyancer and valuer with experience in this area.
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 in-depth market knowledge procuring Chinatown lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
William was the the leasehold proprietor of a high value apartment in Chinatown being sold with a lease of a few days over sixty years outstanding. William on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were William to invoke his statutory right. William procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Mrs V Adams moved into a purpose-built apartment in Chinatown in March 1996. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar flats in Chinatown with an extended lease were worth £233,200. The average ground rent payable was £60 billed every twelve months. The lease expired in 2086. Having 61 years unexpired we approximated the premium to the freeholder for the lease extension to be between £22,800 and £26,400 exclusive of legals.
An example of a Freehold Enfranchisement case for a Chinatown property is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case related to 2 flats. The remaining number of years on the lease was 73.92 years.