For those whose Chadwell Heath property is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
Leasehold properties in Chadwell Heath with in excess of one hundred years remaining 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 freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Chadwell Heath,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chadwell Heath valuers.
Aaron owned a 2 bedroom flat in Chadwell Heath on the market with a lease of a little over fifty eight years remaining. Aaron on an informal basis contacted his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Aaron to exercise his statutory right. Aaron obtained expert legal guidance and secured an acceptable deal informally and sell the property.
In 2012 we were approached by Mr and Mrs. B Sharif who, having was assigned a lease of a one bedroom apartment in Chadwell Heath in August 2008. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparative flats in Chadwell Heath with 100 year plus lease were worth £200,000. The average amount of ground rent was £50 invoiced annually. The lease finished in 2102. Given that there were 77 years left we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus professional charges.
An example of a Lease Extension case for a Chadwell Heath residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 61.36 years.