On the balance of probabilities if you own a flat in Chester you actually own a long leasehold interest over your property
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
The lawyers that we work with handle Chester 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 lawyer we work with provide it.
Off the back of lengthy correspondence with the freeholder of her one bedroom apartment in Chester, Samantha started the lease extension process just as her lease was nearing the crucial eighty-year deadline. The legal work completed in November 2014. The freeholder’s costs were restricted to below 700 GBP.
In 2011 we were contacted by Mr Rory Young who, having moved into a basement flat in Chester in February 2012. We are asked if we could approximate the premium would likely be to prolong the lease by 90 years. Identical homes in Chester with a long lease were worth £216,000. The mid-range ground rent payable was £60 billed monthly. The lease concluded on 3 July 2083. Given that there were 58 years left we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of legals.
Last Autumn we were phoned by Dr Toby Howard , who completed a garden apartment in Chester in August 2005. The question was if we could estimate the premium could be for a ninety year extension to my lease. Comparative premises in Chester with an extended lease were in the region of £205,000. The average ground rent payable was £50 invoiced every twelve months. The lease end date was on 2 November 2103. Having 78 years left we calculated the compensation to the freeholder to extend the lease to be between £7,600 and £8,800 plus fees.