There is no doubt about it a leasehold flat or house in Upper Clapton is a wasting asset as a result of the shortening lease. Where the residual term has, in excess of 100 years remaining then this decrease may be of little impact that being said there will become a stage when a lease has less than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main logic behind why you should consider extending sooner rather than later. Many flat owners in Upper Clapton will qualify for this right; however a lawyer can advise if you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same 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 decades to come.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Upper Clapton leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Callum owned a high value flat in Upper Clapton being sold with a lease of a few days over sixty years remaining. Callum on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Callum to exercise his statutory right. Callum obtained expert advice and secured satisfactory deal informally and readily saleable.
Last February we were approach by Mr M Green , who bought a ground floor apartment in Upper Clapton in April 2012. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative properties in Upper Clapton with 100 year plus lease were in the region of £198,800. The mid-range ground rent payable was £55 invoiced per annum. The lease finished on 28 September 2080. Given that there were 55 years unexpired we approximated the compensation to the landlord for the lease extension to be within £33,300 and £38,400 exclusive of expenses.
An example of a Lease Extension decision for a Upper Clapton premises is Flat 25, Stamford Hill Mansions Stamford Hill in April 2010. The Tribunal therefore determined that the premium to be paid by the lessee to the freeholder for the extension of the lease should be £28,984.00 This case related to 1 flat. The unexpired term as at the valuation date was 59 years.