The market value of North Cheam leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase significantly once the unexpired lease term is less than eighty years
Leasehold residencies in North Cheam with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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 are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in North Cheam can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with North Cheam lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ben was the the leasehold owner of a high value apartment in North Cheam being sold with a lease of a few days over 59 years unexpired. Ben informally spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ben to exercise his statutory right. Ben obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Winter we were e-mailed by Mr and Mrs. P Stewart , who purchased a studio apartment in North Cheam in July 2011. The question was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Similar properties in North Cheam with an extended lease were worth £216,000. The average amount of ground rent was £60 collected annually. The lease lapsed on 8 April 2084. Considering the 58 years remaining we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of fees.
In 2010 we were called by Dr A Anderson who, having acquired a basement flat in North Cheam in April 1998. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Similar flats in North Cheam with a long lease were in the region of £205,000. The mid-range amount of ground rent was £50 collected quarterly. The lease lapsed on 23 May 2104. Given that there were 78 years left we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.