The market value of Chapeltown leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the unexpired lease term is below than 80 years
Leasehold premises in Chapeltown with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Chapeltown 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.
Following lengthy negotiations with the freeholder of her leasehold apartment in Chapeltown, Morgan started the lease extension process as the 80 year threshold was quickly nearing. The legal work completed in June 2005. The landlord’s charges were kept to an absolute minimum.
Last Winter we were contacted by Dr V Edwards , who completed a one bedroom flat in Chapeltown in August 2011. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative properties in Chapeltown with a long lease were valued about £275,000. The mid-range ground rent payable was £65 billed annually. The lease ran out in 2093. Having 68 years as a residual term we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus costs.
In 2012 we were phoned by Dr Liam Sánchez who, having bought a recently refurbished apartment in Chapeltown in January 2002. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative premises in Chapeltown with 100 year plus lease were worth £208,600. The average ground rent payable was £60 collected quarterly. The lease finished on 24 February 2082. Taking into account 57 years unexpired we calculated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of legals.