If you are facing a significant premium because your lease in Chadwell Heath has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should commence your Chadwell Heath lease extension today:
A Chadwell Heath lease depreciates with the years remaining on the lease.
The closer a residential lease in Chadwell Heath gets to zero years unexpired, the more it reduces the value of the property. Where the residual term has, in excess of 99 years remaining then this decrease may be negligible however 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 sharply the cost. It is the primary logic behind why you should consider extending without delay. Most flat owners in Chadwell Heath will qualify for this right; that being said a conveyancing solicitor should be able to advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
An extended lease is almost the same value as a freehold
Leasehold properties in Chadwell Heath with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
Banks and Building Societies will not loan monies with a short lease
Mortgage companies do not lend on short residential leases. You most probably encounter difficulties where you wish to sell your flat in Chadwell Heath if the unexpired lease term is under the criteria set by most mortgage companies. Different mortgage companies have varying requirements but in the main theyrequire an unexpired term of at least 65 years.
| Lender |
Requirement
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| 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.
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| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| 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.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Get in touch with one of our Chadwell Heath lease extension solicitors or enfranchisement solicitors
Irrespective of whether you are a tenant or a freeholder in Chadwell Heath,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chadwell Heath valuers.
Chadwell Heath Lease Extension Example Cases:
Melissa, Chadwell Heath, Essex,
In the wake of 9 months of protracted correspondence with the landlord of her purpose-built apartment in Chadwell Heath, Melissa initiated the lease extension process just as her lease was nearing the crucial 80-year threshold. The transaction was finalised in May 2009. The landlord’s costs were kept to an absolute minimum.
Chadwell Heath case:
Last year we were approach by Mr and Mrs. W Walker , who
acquired a ground floor apartment in Chadwell Heath in November 1999. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Comparable homes in Chadwell Heath with an extended lease were valued around £210,000. The average ground rent payable was £50 billed yearly. The lease came to a finish on 13 November 2106. Taking into account 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus costs.
Decision in Redbridge
An example of a Lease Extension matter before the tribunal for a Chadwell Heath property is
49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925
This case related to 1 flat. The unexpired term was 61.36 years.