When it comes to long leasehold premises in Chester, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly once there are fewer than eighty years left. Anyone in Chester with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. When a lease has less than eighty years remaining, under the current Act the freeholder can calculate and demand a larger premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold properties in Chester with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Lease extensions in Chester can be a difficult process. We recommend you procure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Chester lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Joshua, came precariously near to the eighty-year mark with the lease on his one bedroom apartment in Chester. In buying his property 18 years ago, the length of the lease was of no relevance. Thankfully, he recognised he needed to take steps soon on Extending the lease. Joshua extended the lease at the eleventh hour in January. Joshua and the freeholder via the managing agents ultimately agreed on the final figure of £5,000 . If he failed to meet the deadline, the premium would have gone up by at least £1,125.
In 2011 we were approached by Mr and Mrs. A Reed who, having owned a basement flat in Chester in October 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Chester with 100 year plus lease were in the region of £216,000. The average ground rent payable was £60 invoiced monthly. The lease terminated in 2084. Considering the 58 years as a residual term we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 plus legals.
In 2012 we were approached by Ms Amber Davis who, having acquired a newly refurbished flat in Chester in February 2002. The dilemma was if we could approximate the price would likely be to prolong the lease by 90 years. Identical properties in Chester with a long lease were in the region of £200,000. The average amount of ground rent was £50 invoiced monthly. The lease concluded in 2104. Considering the 78 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including costs.