When it comes to residential leasehold premises in Chelsea, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than eighty years remaining. Anyone in Chelsea with a lease drawing near to 81 years unexpired should seriously consider extending it sooner rather than later. When the lease term has below eighty years outstanding, under the current statute the freeholder can calculate and levy a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Chelsea with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Barclays plc | |
| Godiva Mortgages | |
| National Westminster Bank | |
| Santander |
Engaging our service gives you increased control over the value of your Chelsea leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Jasper, started to get near to the eighty-year mark with the lease on his leasehold flat in Chelsea. Having bought his property 19 years previously, the lease term was of no importance. Luckily, he realised he would imminently be paying an escalated premium for Extending the lease. Jasper extended the lease just in the nick of time last June. Jasper and the freeholder in the end settled on sum of £6,000 . If he had missed the deadline, the amount would have increased by a minimum £1,075.
Dr E Young moved into a studio flat in Chelsea in November 2012. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Identical flats in Chelsea with an extended lease were valued about £186,000. The average ground rent payable was £65 collected yearly. The lease terminated on 2 June 2084. Given that there were 58 years left we approximated the premium to the landlord to extend the lease to be between £24,700 and £28,600 not including professional charges.
An example of a Lease Extension case for a Chelsea premises is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The unexpired term as at the valuation date was 57.06 years.