As the length of the unexpired term of a Chelsea domestic lease lessens so does its value and therefore the value of your property. Where the residual term has, in excess of 100 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease sooner rather than later. The majority of flat owners in Chelsea will qualify for this right; that being said a conveyancer will be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold premises in Chelsea with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Yorkshire 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. |
Lease extensions in Chelsea can be a difficult process. We recommend you secure professional help from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Chelsea lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last Christmas Eli, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Chelsea. Having bought his flat 19 years previously, the length of the lease was of little bearing. Fortunately, he became aware that he needed to take steps soon on a lease extension. Eli extended the lease at the eleventh hour in August. Eli and the freeholder via the management company subsequently settled on sum of £6,000 . If the lease had descended below 80 years, the premium would have increased by a minimum £1,000.
Mr and Mrs. N Rogers owned a newly refurbished flat in Chelsea in November 2002. We are asked if we could estimate the premium could be to extend the lease by ninety years. Comparative homes in Chelsea with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £55 collected per annum. The lease came to a finish on 10 July 2104. Considering the 78 years remaining we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a Chelsea flat 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 was 57.06 years.