Unfortunately that a Chaddesden residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Chaddesden property prices.Where your lease has approximately ninety years left, you need to start thinking about 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 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Chaddesden will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold premises in Chaddesden with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
Lease extensions in Chaddesden can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Chaddesden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Thomas, started to get close to the 80-year threshold with the lease on his leasehold flat in Chaddesden. Having bought his home 18 years ago, the unexpired term was of no significance. Thankfully, he noticed he needed to take steps soon on a lease extension. Thomas was able to extend his lease just under the wire in January. Thomas and the freeholder in the end settled on the final figure of £5,500 . If the lease had dipped to less than 80 years, the premium would have become more costly by a minimum £1,000.
Last Summer we were approach by Dr J Lee , who purchased a one bedroom apartment in Chaddesden in May 2003. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative premises in Chaddesden with an extended lease were in the region of £245,000. The mid-range ground rent payable was £50 billed every twelve months. The lease terminated on 23 July 2093. Given that there were 68 years outstanding we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.
In 2010 we were contacted by Dr D Rose who, having owned a one bedroom flat in Chaddesden in September 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by a further 90 years. Identical properties in Chaddesden with an extended lease were valued around £285,000. The average ground rent payable was £55 invoiced monthly. The lease terminated on 24 August 2104. Considering the 79 years remaining we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus professional charges.