As the the remaining lease term of a Chelsea domestic lease diminished so does its value and therefore the value of your property. Where the residual term has, in excess of 99 years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main reason why you should extend the lease sooner than later. Most flat owners in Chelsea will qualify for this right; however a conveyancer can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold residencies in Chelsea 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 property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you increased control over the value of your Chelsea leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful discussions with the landlord of her ground floor apartment in Chelsea, Jennifer commenced the lease extension process just as the lease was coming close to the critical eighty-year threshold. The transaction completed in July 2007. The freeholder’s charges were restricted to about 650 GBP.
Mr Kyle Allen completed a first floor flat in Chelsea in August 2005. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Similar flats in Chelsea with 100 year plus lease were worth £235,200. The mid-range ground rent payable was £45 collected yearly. The lease elapsed in 2092. Taking into account 66 years outstanding we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.
An example of a Lease Extension decision for a Chelsea property 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 affected 1 flat. The unexpired residue of the current lease was 57.06 years.