Chepstow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Chepstow tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Chepstow you would be well advised to check if your lease has between 70 and ninety years left. There are good reasons why a Chepstow flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is put in place without delay
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a landlord in Chepstow,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chepstow valuers.
In recent months Alfie, came dangerously close to the 80-year threshold with the lease on his purpose- built flat in Chepstow. In buying his property two decades ago, the length of the lease was of minimal relevance. As luck would have it, he realised he would soon be paying an inflated amount for Extending the lease. Alfie extended the lease at the eleventh hour last March. Alfie and the landlord who owned the flat above eventually settled on sum of £6,000 . If he failed to meet the deadline, the figure would have increased by at least £950.
Dr Sophia White completed a purpose-built flat in Chepstow in May 2009. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Identical residencies in Chepstow with a long lease were in the region of £183,600. The mid-range ground rent payable was £65 invoiced quarterly. The lease concluded in 2082. Having 57 years remaining we estimated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus professional charges.
Last Spring we were contacted by Mr and Mrs. O Davies , who purchased a basement apartment in Chepstow in June 2011. The dilemma was if we could approximate the premium would be to prolong the lease by ninety years. Comparable homes in Chepstow with 100 year plus lease were worth £245,000. The mid-range ground rent payable was £50 billed annually. The lease terminated on 21 October 2093. Considering the 68 years left we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of legals.