Chelmsley Wood leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Most owners of residential leasehold property in Chelmsley Wood enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Chelmsley Wood you must check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Chelmsley Wood with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle 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.
Two years ago Alfie, came precariously close to the eighty-year threshold with the lease on his studio apartment in Chelmsley Wood. Having bought his home 19 years previously, the unexpired term was of no importance. Luckily, he recognised he needed to take steps soon on a lease extension. Alfie arranged for a lease extension just in the nick of time last July. Alfie and the landlord eventually agreed on sum of £6,000 . If the lease had descended lower than 80 years, the figure would have gone up by a minimum £900.
Last Autumn we were contacted by Mr and Mrs. O Cook , who purchased a garden flat in Chelmsley Wood in June 2000. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparable premises in Chelmsley Wood with an extended lease were worth £280,000. The average ground rent payable was £55 billed every twelve months. The lease concluded on 1 May 2103. Considering the 78 years unexpired we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of legals.
Last Winter we were contacted by Mr and Mrs. I Rose , who moved into a recently refurbished apartment in Chelmsley Wood in February 2008. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparable homes in Chelmsley Wood with a long lease were worth £191,000. The average amount of ground rent was £65 collected quarterly. The lease ended in 2083. Considering the 58 years as a residual term we calculated the premium to the landlord for the lease extension to be within £23,800 and £27,400 not including legals.