With a domestic leasehold premises in Chelmsford, you are in fact renting it for a certain amount of time. Modern 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 rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive notably when there are fewer than eighty years remaining. Residents in Chelmsford with a lease nearing 81 years left should seriously think of extending it without delay. Once a lease has under 80 years outstanding, under the relevant statute the landlord is entitled to calculate and levy a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in Chelmsford with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Chelmsford 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.
Last Winter Harvey, came critically near to the 80-year threshold with the lease on his purpose- built flat in Chelmsford. Having purchased his flat two decades ago, the unexpired term was of little significance. Fortunately, he realised he would imminently be paying an escalated premium for a lease extension. Harvey extended the lease at the eleventh hour in August. Harvey and the landlord subsequently agreed on an amount of £6,000 . If the lease had slid below eighty years, the sum would have escalated by a minimum £925.
In 2011 we were called by Dr R Lewis who, having owned a basement flat in Chelmsford in February 2007. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparable residencies in Chelmsford with a long lease were worth £265,000. The average amount of ground rent was £50 collected yearly. The lease elapsed on 24 May 2100. Considering the 74 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Mrs I Wright took over the lease of a one bedroom flat in Chelmsford in November 1996. The question was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Comparable residencies in Chelmsford with an extended lease were in the region of £166,400. The mid-range amount of ground rent was £60 collected quarterly. The lease ended on 3 August 2080. Taking into account 54 years left we approximated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of legals.