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Main reasons to start your Chelmsley Wood lease extension


Main reasons to start your Chelmsley Wood lease extension today:

Increase your lease and increase your Chelmsley Wood property value

The market value of a leasehold property in Chelmsley Wood depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be addressed ahead of the eighty year cut off point. Current legislation entitles Chelmsley Wood qualifying lessees to acquire a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.

An extended lease has roughly the same value as a freehold

Leasehold residencies in Chelmsley Wood with more than 100 years unexpired 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 situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.

Lending institutions will not grant a mortgage on a short lease

Almost all banks and building societies will be unwilling to grant a mortgage on a lease with under seventy years left to run - although this varies from lender to lender. A purchaser will likely find it difficult in obtaining a mortgage and this could result in your Chelmsley Wood property becoming difficult to sell or to obtain finance on.

Lender Requirement
Bank of Scotland Minimum 70 years from the date of the mortgage.
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.
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.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

What makes us experts in Chelmsley Wood lease extensions?

The conveyancers that we work with procure Chelmsley Wood 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 conveyancer we work with provide it.

Chelmsley Wood Lease Extension Case Studies:

Nathaniel, Chelmsley Wood, Birmingham

During the course of the last few months Nathaniel, started to get near to the eighty-year mark with the lease on his leasehold flat in Chelmsley Wood. In buying his property two decades ago, the length of the lease was of minimal relevance. Luckily, he noticed he would soon be paying an inflated amount for Extending the lease. Nathaniel arranged for a lease extension just ahead of time in September. Nathaniel and the landlord subsequently settled on an amount of £5,000 . If he failed to meet the deadline, the amount would have increased by at least £1,050.

Chelmsley Wood case:

Last year we were called by Dr Reuben Martin , who acquired a basement flat in Chelmsley Wood in May 2007. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Identical flats in Chelmsley Wood with 100 year plus lease were in the region of £260,000. The mid-range ground rent payable was £50 invoiced monthly. The lease lapsed in 2095. Taking into account 71 years unexpired we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.

Chelmsley Wood case:

Dr V Gunderson owned a studio apartment in Chelmsley Wood in August 2007. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar residencies in Chelmsley Wood with an extended lease were in the region of £254,200. The average ground rent payable was £60 billed every twelve months. The lease concluded on 11 October 2075. Considering the 51 years remaining we calculated the premium to the landlord to extend the lease to be between £43,700 and £50,600 not including professional charges.