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Why you should start your Chelsea lease extension

Main reasons to start your Chelsea lease extension today:

A Chelsea lease depreciates with the years remaining on the lease.

Chelsea leases on domestic deteriorating in value. Where your lease has approximately 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you begin incurring an additional element called marriage value. Flat owners in Chelsea will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm your eligibility. In certain cases you may not be entitled. There are also strict deadlines and formalities to comply with once the process has commenced so it’s wise to be guided by a conveyancer during the process.

Chelsea property with a lease extension is almost the same value as a freehold

It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.

Banks and Building Societies may decide not to loan monies on a short lease

The trend since the credit crunch has been for banks to tighten lending requirements across the board - this has extended to the property over which the home loan is to be granted. This has resulted in the minimum number of years remaining under the lease required by mortgage companies has increased. Historically banks would grant a mortgage on a lease with twenty years plus the term of the loan - typically fifty year leases but those requirements evolved by the requirement for lengthy leases - many use a minimum term of 75 years as standard.

Lender Requirement
Barclays plc Mortgage term plus 25 years
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.
Coventry Building Society 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.
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 Mortgage term plus 30 years subject to an overall minimum term of 70 years

What makes us experts in Chelsea lease extensions?

Retaining our service will provide you enhanced control over the value of your Chelsea leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.

Chelsea Lease Extension Example Cases:

Hugo, Chelsea, West London

Half a year ago Hugo, started to get close to the 80-year mark with the lease on his studio apartment in Chelsea. Having bought his home two decades ago, the unexpired term was of minimal relevance. Luckily, he became aware that he needed to take steps soon on a lease extension. Hugo was able to extend his lease just under the wire last September. Hugo and the landlord who owned the flat above in the end settled on a premium of £5,000 . If the lease had dipped below eighty years, the amount would have become more exhorbitant by a minimum £1,000.

Chelsea case:

In 2011 we were approached by Mr and Mrs. N Brown who, having was assigned a lease of a one bedroom apartment in Chelsea in April 2003. We are asked if we could approximate the price would likely be for a ninety year lease extension. Comparative premises in Chelsea with an extended lease were in the region of £250,000. The mid-range ground rent payable was £50 collected quarterly. The lease came to a finish in 2088. Given that there were 69 years left we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of fees.

Decision in Wandsworth

An example of a Lease Extension matter before the tribunal 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 number of years remaining on the existing lease(s) was 57.06 years.