It’s a harsh truth that a Chingford residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Chingford property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Chingford will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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 also be not less than 75 years at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives 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 decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Callum was the the leasehold proprietor of a 2 bedroom apartment in Chingford being sold with a lease of fraction over fifty eight years remaining. Callum on an informal basis contacted his freeholder a well known local-based freehold company for a lease extension. 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 payable on a lease extension were Callum to exercise his statutory right. Callum obtained expert advice and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
In 2010 we were called by Mr and Mrs. N Hall who, having moved into a basement apartment in Chingford in February 2009. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Similar homes in Chingford with an extended lease were in the region of £227,800. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease terminated in 2090. Given that there were 65 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including costs.
An example of a Freehold Enfranchisement matter before the tribunal 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 was in relation to 2 flats. The unexpired residue of the current lease was 69.26 years.