It’s an underpublicised truth that a Chelmsley Wood residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Chelmsley Wood property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Chelmsley Wood will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Chelmsley Wood leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jake was the the leasehold proprietor of a conversion apartment in Chelmsley Wood on the market with a lease of a few days over sixty years left. Jake informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Jake to invoke his statutory right. Jake obtained expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2013 we were contacted by Dr H Brown who, having acquired a purpose-built apartment in Chelmsley Wood in August 2000. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Comparable premises in Chelmsley Wood with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 invoiced annually. The lease expired on 10 February 2099. Having 73 years left we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.
Dr P Wood purchased a garden flat in Chelmsley Wood in November 1996. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparative residencies in Chelmsley Wood with 100 year plus lease were in the region of £264,000. The average ground rent payable was £60 collected monthly. The lease lapsed on 23 October 2079. Considering the 53 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £37,100 and £42,800 not including expenses.