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Why you should commence your Chelsea lease extension

Top reasons for lease extension now:

A Chelsea lease depreciates with the years remaining on the lease.

The market value of Chelsea leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is less than eighty years

Chelsea property with a lease extension is almost the same value as a freehold

It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.

Lenders may not finance a property on a short lease

Mortgage companies are really restricting their approach as regards to properties in Chelsea with short leases. For example you may find that their lending requirements are stricter and that they alter interest rates depending on how many years are left on the lease. Some may even refrain from lending completely, so where you wanted to sell, your remaining options would be to find a cash buyer, or try your luck at auction thus reducing your market.

Lender Requirement
Accord Mortgages 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.
Godiva Mortgages 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.
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.

Why use us for your lease extension in Chelsea?

The lawyers that we work with handle Chelsea 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 conveyancing solicitor we work with provide it.

Chelsea Lease Extension Example Cases:

Harry, Chelsea, West London

In recent months Harry, came very near to the 80-year threshold with the lease on his studio flat in Chelsea. In buying his flat 19 years ago, the lease term was of minimal bearing. Thankfully, he noticed he would soon be paying way over the odds for Extending the lease. Harry was able to extend his lease just under the wire in June. Harry and the freeholder via the managing agents ultimately settled on a premium of £5,500 . If he failed to meet the deadline, the premium would have gone up by at least £1,100.

Chelsea case:

In 2012 we were contacted by Dr K Parker who, having was assigned a lease of a newly refurbished flat in Chelsea in July 2012. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Identical flats in Chelsea with an extended lease were worth £275,000. The average amount of ground rent was £55 billed quarterly. The lease ended on 23 March 2102. Taking into account 77 years outstanding we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus fees.

Decision in Wandsworth

An example of a Lease Extension matter before the tribunal for a Chelsea flat is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The unexpired lease term was 57.06 years.