Chellaston leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Chellaston tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Chellaston you would be well advised to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Chellaston with over 100 years left 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 situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant 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 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service will provide you better control over the value of your Chellaston leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Harrison owned a high value flat in Chellaston on the market with a lease of fraction over sixty years left. Harrison on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Harrison to exercise his statutory right. Harrison procured expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Ms Maisie Johnson owned a one bedroom apartment in Chellaston in October 2002. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Chellaston with 100 year plus lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected quarterly. The lease terminated on 20 May 2096. Having 70 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £10,500 and £12,000 exclusive of legals.
Last Winter we were contacted by Dr D Pérez , who bought a purpose-built flat in Chellaston in May 1997. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative residencies in Chellaston with an extended lease were in the region of £246,800. The mid-range amount of ground rent was £60 invoiced quarterly. The lease elapsed on 18 October 2076. Considering the 50 years remaining we approximated the premium to the landlord to extend the lease to be between £44,700 and £51,600 exclusive of expenses.