The re-sale value of a leasehold property in Chesham is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to start the process of extending the lease is when the lease still has 82 years remaining so that all matters can be concluded in advance of the eighty year cut off point. Current legislation enables Chesham qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Chesham with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Chesham 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.
Last Spring Jamie, started to get close to the eighty-year mark with the lease on his purpose- built flat in Chesham. In buying his property two decades ago, the length of the lease was of no bearing. by good luck, he recognised he would soon be paying an escalated premium for a lease extension. Jamie arranged for a lease extension just under the wire in June. Jamie and the landlord ultimately agreed on an amount of £5,000 . If the lease had gone to less than eighty years, the premium would have escalated by at least £900.
In 2013 we were e-mailed by Dr L Thompson who, having was assigned a lease of a one bedroom flat in Chesham in January 2010. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Comparative residencies in Chesham with an extended lease were in the region of £208,200. The average amount of ground rent was £65 billed quarterly. The lease lapsed on 1 May 2087. Having 61 years left we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 not including professional charges.
In 2014 we were phoned by Mr and Mrs. S Wright who, having owned a ground floor apartment in Chesham in January 1996. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Comparable residencies in Chesham with a long lease were valued around £260,000. The mid-range ground rent payable was £50 billed yearly. The lease came to a finish on 26 November 2098. Considering the 72 years unexpired we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.