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Main reasons to start your Chinatown lease extension

Top reasons for lease extension now:

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

The market value of a leasehold property in Chinatown is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be concluded in advance of the eighty year mark. Leasehold Reform legislation entitles Chinatown qualifying lessees to an additional term of ninety years on top of the unexpired term, at a notional rent (zero ground rent). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.

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

It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.

Banks and Building Societies may decide not to lend on a short lease

The definition of a short lease varies by mortgage company, yet mortgage lenders start to get concerned at around 75 years. This may be problematic when you wish to dispose of or refinance your flat as it will be practically unmortgageable. You may have no immediate plan to sell but when you do your buyer must hold off for 2 years before being able to exercise the right to a an extension to the lease.

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.
Barnsley Building Society 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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.
HSBC All Residential leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset.

All Buy to Let leasehold properties must have more than 35 years remaining on the lease beyond the term of the mortgage at the outset.
Lloyds TSB Scotland Mortgage term plus 30 years subject to an overall minimum term of 70 years

What makes us experts in Chinatown lease extensions?

Engaging our service will provide you increased control over the value of your Chinatown leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.

Chinatown Lease Extension Example Cases:

Lewis, Chinatown, London,

Lewis owned a 2 bedroom flat in Chinatown being marketed with a lease of just over 61 years remaining. Lewis on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Lewis to exercise his statutory right. Lewis obtained expert advice and secured an acceptable deal without going to tribunal and sell the flat.

Chinatown case:

In 2012 we were approached by Dr Kian Clark who, having acquired a ground floor flat in Chinatown in June 2012. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Comparative properties in Chinatown with a long lease were valued around £181,600. The average ground rent payable was £55 collected yearly. The lease concluded on 22 November 2071. Given that there were 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of expenses.

Decision in Redbridge

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 unexpired term was 73.92 years.