It’s an underpublicised truth that a Chelmsford residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Chelmsford property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Chelmsford will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a landlord in Chelmsford,the lease extension solicitors that we work with will always be prepared 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.
Ethan was the the leasehold owner of a 2 bedroom apartment in Chelmsford on the market with a lease of a few days over 72 years unexpired. Ethan on an informal basis approached his landlord a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Ethan to invoke his statutory right. Ethan procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
In 2014 we were contacted by Mr and Mrs. P Cox who, having owned a purpose-built flat in Chelmsford in November 2005. The question was if we could approximate the premium could be to prolong the lease by 90 years. Comparable residencies in Chelmsford with an extended lease were in the region of £168,800. The mid-range ground rent payable was £60 billed quarterly. The lease expired on 13 April 2081. Having 55 years unexpired we approximated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 not including fees.
Last June we were phoned by Mr and Mrs. N Rogers , who completed a basement apartment in Chelmsford in July 2012. The question was if we could approximate the price could be to prolong the lease by a further 90 years. Comparative properties in Chelmsford with a long lease were worth £235,200. The mid-range amount of ground rent was £45 billed yearly. The lease elapsed in 2092. Considering the 66 years unexpired we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.