It’s a harsh certainty that a Chatteris residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Chatteris property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Chatteris will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Chatteris leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Omar, started to get close to the 80-year threshold with the lease on his leasehold apartment in Chatteris. Having purchased his home two decades ago, the lease term was of no bearing. Fortunately, he became aware that he needed to take steps soon on Extending the lease. Omar arranged for a lease extension at the eleventh hour in July. Omar and the landlord who owned the flat above ultimately agreed on the final figure of £6,000 . If the lease had descended to less than eighty years, the sum would have gone up by at least £1,025.
In 2013 we were e-mailed by Dr L Cooper who, having moved into a studio apartment in Chatteris in October 1998. The dilemma was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Identical residencies in Chatteris with 100 year plus lease were worth £205,000. The average amount of ground rent was £50 invoiced annually. The lease lapsed on 9 March 2105. Taking into account 79 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including fees.
In 2014 we were contacted by Dr Rory Smith who, having purchased a garden apartment in Chatteris in October 2007. We are asked if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Similar properties in Chatteris with an extended lease were in the region of £275,000. The mid-range ground rent payable was £65 billed annually. The lease ended on 16 July 2094. Taking into account 68 years outstanding we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of expenses.