On the balance of probabilities where you own a flat in Chingford you actually own a long leasehold interest over your property
Leasehold residencies in Chingford with in excess of 100 years unexpired 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
Engaging our service gives you enhanced control over the value of your Chingford leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Blake, came seriously near to the 80-year threshold with the lease on his leasehold flat in Chingford. Having purchased his flat two decades ago, the unexpired term was of minimal bearing. Thankfully, he became aware that he needed to take steps soon on a lease extension. Blake extended the lease just ahead of time last January. Blake and the landlord in the end settled on the final figure of £5,500 . If the lease had descended to less than 80 years, the amount would have increased by at least £1,100.
Last Autumn we were e-mailed by Mr B Torres , who purchased a basement flat in Chingford in August 1997. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Chingford with a long lease were worth £208,200. The average ground rent payable was £65 invoiced annually. The lease expired in 2087. Given that there were 61 years as a residual term we approximated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Chingford flat 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 remaining number of years on the lease was 69.26 years.