For those whose Chelsea home is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | |
| Birmingham Midshires | |
| Nationwide Building Society | |
| Royal Bank of Scotland | |
| Virgin |
Retaining our service will provide you better control over the value of your Chelsea leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Matthew owned a studio flat in Chelsea on the market with a lease of just over fifty eight years unexpired. Matthew on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Matthew to invoke his statutory right. Matthew obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Last June we were called by Dr Catherine Wilson , who purchased a one bedroom flat in Chelsea in February 2012. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Identical premises in Chelsea with 100 year plus lease were valued around £250,000. The mid-range amount of ground rent was £50 collected annually. The lease expired on 3 February 2095. Taking into account 69 years unexpired we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired term as at the valuation date was 57.06 years.