The nearer a residential lease in Chelmsford gets to zero years unexpired, the the greater the reduction in the value of the property. If the lease has, more than one hundred years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should consider extending sooner rather than later. The majority of flat owners in Chelmsford will meet the qualifying criteria; that being said a lawyer can advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Chelmsford leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Henry was the the leasehold proprietor of a 2 bedroom apartment in Chelmsford on the market with a lease of a little over sixty years outstanding. Henry informally approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Henry to invoke his statutory right. Henry procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last year we were contacted by Dr G Roux , who acquired a newly refurbished flat in Chelmsford in May 1998. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Comparable properties in Chelmsford with an extended lease were in the region of £280,000. The mid-range amount of ground rent was £55 billed monthly. The lease came to a finish on 5 October 2104. Having 78 years outstanding we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus expenses.
Last Christmas we were phoned by Mrs Sarah Peterson , who acquired a basement apartment in Chelmsford in May 2001. The question was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Identical homes in Chelmsford with an extended lease were valued around £186,000. The average ground rent payable was £65 billed quarterly. The lease elapsed on 5 March 2084. Given that there were 58 years remaining we calculated the compensation to the freeholder for the lease extension to be between £24,700 and £28,600 exclusive of fees.