North Cheam residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a set term.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with handle North Cheam lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
During the course of the last few months George, started to get close to the eighty-year mark with the lease on his purpose- built flat in North Cheam. In buying his flat two decades ago, the length of the lease was of little significance. As luck would have it, he realised he would imminently be paying way over the odds for a lease extension. George was able to extend his lease at the eleventh hour last April. George and the landlord who owned the flat above eventually settled on the final figure of £5,000 . If he had missed the deadline, the price would have escalated by at least £1,050.
Mr and Mrs. R Carter acquired a purpose-built apartment in North Cheam in February 2001. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Identical residencies in North Cheam with an extended lease were valued about £174,200. The mid-range ground rent payable was £55 collected every twelve months. The lease lapsed on 1 May 2076. Having 51 years remaining we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 not including costs.
Last June we were phoned by Ms W Baker , who took over the lease of a purpose-built flat in North Cheam in January 2009. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Identical residencies in North Cheam with 100 year plus lease were valued around £285,000. The mid-range amount of ground rent was £45 billed monthly. The lease terminated in 2096. Taking into account 71 years as a residual term we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.