When it comes to residential leasehold premises in Chelmsford, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are less than 80 years remaining. Anyone in Chelmsford with a lease approaching 81 years left should seriously consider extending it sooner rather than later. When the lease term has below 80 years left, under the current statute the freeholder can calculate and demand a larger amount, assessed on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
The conveyancing solicitors that we work with handle Chelmsford lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Off the back of unsuccessful correspondence with the landlord of her one bedroom apartment in Chelmsford, Jordan commenced the lease extension process as the 80 year threshold was swiftly nearing. The lease extension was finalised in July 2010. The landlord’s costs were restricted to slightly above 450 GBP.
In 2012 we were phoned by Dr Ellie François who, having owned a studio apartment in Chelmsford in March 1997. The question was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparative properties in Chelmsford with an extended lease were worth £210,600. The average ground rent payable was £45 billed annually. The lease ran out in 2088. Considering the 62 years outstanding we estimated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of legals.
In 2012 we were called by Dr E Brown who, having was assigned a lease of a purpose-built flat in Chelmsford in June 1998. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative residencies in Chelmsford with 100 year plus lease were worth £260,000. The average ground rent payable was £50 collected annually. The lease concluded in 2099. Taking into account 73 years as a residual term we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including legals.