The re-sale value of a leasehold property in Chatteris depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. It is ideal to start the process of extending the lease is when the lease still has 82 years to run so that all matters can be addressed well before the 80 year cut off point. Statute enables Chatteris qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Chatteris with more than 100 years outstanding on the lease are often regarded as a ‘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 buying the freehold unless savings on ground rent and service charges merit 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
The conveyancers that we work with procure Chatteris lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Off the back of unsuccessful discussions with the freeholder of her garden apartment in Chatteris, Elizabeth initiated the lease extension process as the 80 year mark was rapidly coming. The lease extension was finalised in April 2010. The freeholder’s costs were kept to an absolute minimum.
Last October we were contacted by Mr and Mrs. K Bell , who owned a basement apartment in Chatteris in April 1997. We are asked if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Comparative premises in Chatteris with a long lease were valued around £210,000. The mid-range ground rent payable was £50 collected every twelve months. The lease lapsed on 16 October 2105. Having 80 years left we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including expenses.
In 2014 we were called by Mrs Jade Ali who, having purchased a purpose-built apartment in Chatteris in June 2011. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparable properties in Chatteris with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £45 collected monthly. The lease terminated on 16 September 2094. Having 69 years remaining we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of costs.