Unfortunately that a Chelmsford 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 early years due to the depreciation being disguised by increases in the Chelmsford property market.Where your lease has approximately 90 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 slips below eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Chelmsford will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Chelmsford with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Chelmsford,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Chelmsford valuers.
Two years ago Elijah, started to get close to the 80-year threshold with the lease on his first floor apartment in Chelmsford. In buying his property 18 years previously, the lease term was of no concern. Luckily, he noticed he would soon be paying an escalated premium for a lease extension. Elijah extended the lease just under the wire in April. Elijah and the freeholder eventually agreed on a premium of £5,500 . If he had missed the deadline, the premium would have escalated by at least £1,125.
Last Spring we were contacted by Mr and Mrs. E Wilson , who took over the lease of a purpose-built flat in Chelmsford in November 1997. The question was if we could shed any light on how much (roughly) price could be to extend the lease by an additional years. Similar flats in Chelmsford with an extended lease were worth £254,200. The mid-range ground rent payable was £60 billed every twelve months. The lease concluded on 9 April 2077. Taking into account 51 years remaining we approximated the compensation to the freeholder for the lease extension to be between £43,700 and £50,600 not including expenses.
Last month we were contacted by Ms Lucy Thompson , who acquired a newly refurbished apartment in Chelmsford in September 2006. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparable flats in Chelmsford with an extended lease were in the region of £210,600. The mid-range ground rent payable was £45 invoiced monthly. The lease elapsed in 2088. Having 62 years remaining we approximated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 plus professional charges.