With a domestic leasehold premises in North Cheam, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than eighty years remaining. Residents in North Cheam with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. When a lease has under 80 years outstanding, under the current legislation the freeholder can calculate and levy a larger amount, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in North Cheam with in excess of 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancing solicitor we work with provide it.
In recent months Jonathan, started to get close to the eighty-year mark with the lease on his two bedroom flat in North Cheam. In buying his home two decades ago, the lease term was of minimal significance. As luck would have it, he became aware that he would soon be paying an inflated amount for Extending the lease. Jonathan was able to extend his lease just under the wire in May. Jonathan and the freeholder via the management company subsequently settled on a premium of £5,000 . If he had missed the deadline, the price would have escalated by a minimum £1,150.
Mr C Baker was assigned a lease of a studio flat in North Cheam in May 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Identical premises in North Cheam with an extended lease were in the region of £267,600. The mid-range amount of ground rent was £65 billed yearly. The lease expired on 24 August 2092. Taking into account 67 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £14,300 and £16,400 plus costs.
In 2013 we were phoned by Mr and Mrs. A Rodríguez who, having bought a ground floor flat in North Cheam in May 1995. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable properties in North Cheam with a long lease were valued around £206,200. The mid-range amount of ground rent was £55 billed quarterly. The lease elapsed on 16 June 2081. Having 56 years outstanding we estimated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 not including costs.