Chard residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
Leasehold premises in Chard with in excess of 100 years unexpired 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 premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start 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 |
Regardless of whether you are a tenant or a landlord in Chard,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chard valuers.
Aiden was the the leasehold owner of a conversion apartment in Chard being sold with a lease of a few days over fifty eight years left. Aiden on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Aiden to exercise his statutory right. Aiden obtained expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
In 2014 we were contacted by Mr Kyle Rogers who, having was assigned a lease of a ground floor apartment in Chard in August 2009. The question was if we could estimate the premium could be for a ninety year lease extension. Similar homes in Chard with an extended lease were in the region of £275,000. The average ground rent payable was £55 billed quarterly. The lease terminated in 2102. Considering the 76 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.
Last Summer we were e-mailed by Dr Rory Roberts , who bought a studio apartment in Chard in May 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Identical residencies in Chard with an extended lease were worth £176,200. The average amount of ground rent was £65 invoiced per annum. The lease expired in 2082. Considering the 56 years unexpired we approximated the premium to the landlord for the lease extension to be between £29,500 and £34,000 not including costs.