The only way is down when it comes to Chelsea lease terms. Chelsea flats that have a remaining term shorter than eighty years will drop in value even faster, and the cost of extending your lease will go up.
Leasehold premises in Chelsea with more than 100 years left on the lease are often regarded as a ‘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 freehold unless savings on ground rent and estate 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide 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 wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harrison owned a 2 bedroom flat in Chelsea being sold with a lease of just over 72 years left. Harrison on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harrison to exercise his statutory right. Harrison procured expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. L Green , who acquired a recently refurbished flat in Chelsea in August 2005. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Similar homes in Chelsea with 100 year plus lease were in the region of £255,000. The mid-range ground rent payable was £50 billed per annum. The lease finished in 2096. Taking into account 70 years remaining we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
An example of a Lease Extension matter before the tribunal 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 was in relation to 1 flat. The remaining number of years on the lease was 57.06 years.