Clapton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Clapton tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Clapton you really ought to see if your lease has between seventy and ninety years left. There are good reasons why a Clapton flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is effected without delay
Leasehold residencies in Clapton with over one hundred years outstanding 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Clapton,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Clapton valuers.
Adam owned a 2 bedroom flat in Clapton on the market with a lease of just over sixty years outstanding. Adam informally contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Adam to invoke his statutory right. Adam procured expert advice and secured an acceptable resolution informally and sell the property.
Last Winter we were phoned by Dr Elizabeth Turner , who owned a newly refurbished apartment in Clapton in June 2009. The dilemma was if we could estimate the premium would be to extend the lease by a further 90 years. Identical flats in Clapton with 100 year plus lease were in the region of £275,000. The mid-range amount of ground rent was £55 collected monthly. The lease ended in 2103. Given that there were 77 years remaining we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Clapton premises is 104 Nightingale Road in May 2009. The Tribunal's Decision is that the premium torbe paid for the enfranchisement in this case is £112,174 This case related to 10 flats. The unexpired term was 71.25 years.