For those whose Chatteris home is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a property with more than one hundred 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 equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a landlord in Chatteris,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 Chatteris valuers.
Lewis owned a high value apartment in Chatteris on the market with a lease of just over 59 years left. Lewis on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Lewis to invoke his statutory right. Lewis procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Last Spring we were phoned by Mr and Mrs. B Collins , who took over the lease of a newly refurbished flat in Chatteris in November 2009. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative properties in Chatteris with a long lease were in the region of £174,200. The average amount of ground rent was £55 billed quarterly. The lease elapsed in 2076. Given that there were 51 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including fees.
Dr Arthur Turner owned a recently refurbished apartment in Chatteris in May 2006. The question was if we could estimate the premium would likely be to extend the lease by a further 90 years. Identical properties in Chatteris with a long lease were in the region of £285,000. The average ground rent payable was £45 collected monthly. The lease came to a finish on 20 March 2096. Having 71 years left we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.