When it comes to residential leasehold premises in Chingford, you are actually buying an entitlement to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially when there are less than 80 years remaining. Anyone in Chingford with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. When a lease has under eighty years remaining, under the relevant Act the freeholder is entitled to calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
Leasehold premises in Chingford with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Chingford leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Nathan owned a conversion flat in Chingford being sold with a lease of just over 61 years left. Nathan informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be due on a lease extension were Nathan to invoke his statutory right. Nathan obtained expert advice and secured satisfactory deal informally and sell the property.
Last year we were approach by Dr J Rivera , who purchased a one bedroom apartment in Chingford in November 2009. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Identical flats in Chingford with an extended lease were worth £183,600. The average amount of ground rent was £65 invoiced quarterly. The lease lapsed in 2083. Taking into account 57 years outstanding we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including professional charges.
An example of a Freehold Enfranchisement case for a Chingford property is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The unexpired lease term was 69.26 years.