When it comes to long leasehold property in Chelmsford, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are less than 80 years remaining. Residents in Chelmsford with a lease approaching 81 years unexpired should seriously think of extending it sooner than later. Once the lease term has below eighty years outstanding, under the relevant statute the landlord can calculate and charge a greater premium, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Chelmsford with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Chelmsford leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Oliver owned a conversion flat in Chelmsford being sold with a lease of a few days over 61 years remaining. Oliver on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Oliver to invoke his statutory right. Oliver procured expert legal guidance and secured satisfactory deal informally and readily saleable.
In 2013 we were contacted by Dr S Lewis who, having owned a garden apartment in Chelmsford in February 2007. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable residencies in Chelmsford with a long lease were in the region of £270,000. The mid-range ground rent payable was £55 invoiced annually. The lease elapsed on 16 September 2100. Considering the 75 years remaining we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of fees.
Last Summer we were e-mailed by Mr and Mrs. H Rose , who completed a first floor apartment in Chelmsford in May 2002. We are asked if we could estimate the price would be to prolong the lease by an additional years. Identical flats in Chelmsford with a long lease were in the region of £168,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease expired on 24 April 2080. Having 55 years remaining we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of fees.