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Why you should commence your Chesham lease extension


Why you should commence your Chesham lease extension today:

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

Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Chesham. Inevitably, the length of lease remaining reduces over time. This is often overlooked and only becomes a problem when the residence has to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Chesham have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give careful deliberation before delaying your Chesham lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease

An extended lease is almost the same value as a freehold

Leasehold properties in Chesham with over 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 property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.

Lenders may decide not to finance a property with a short lease

Lending institutions are less likely to grant a loan offer on a residential property in Chesham with a short lease. Some lenders simply refuse a mortgage on leases with less than 75 years left.

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.
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.
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.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
Royal Bank of Scotland Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.

Get in touch with one of our Chesham lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a landlord in Chesham,the lease extension solicitors 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 Chesham valuers.

Chesham Lease Extension Example Cases:

Gabriel, Chesham, Buckinghamshire,

Gabriel owned a studio flat in Chesham on the market with a lease of a few days over 72 years outstanding. Gabriel informally approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Gabriel to invoke his statutory right. Gabriel obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.

Chesham case:

Last month we were approach by Mr and Mrs. N Baker , who bought a garden flat in Chesham in July 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Similar properties in Chesham with an extended lease were worth £246,800. The average amount of ground rent was £60 invoiced every twelve months. The lease terminated in 2071. Considering the 50 years outstanding we estimated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 exclusive of costs.

Chesham case:

In 2014 we were called by Ms Katie Díaz who, having was assigned a lease of a purpose-built flat in Chesham in October 2010. We are asked if we could estimate the premium would be for a 90 year lease extension. Similar flats in Chesham with a long lease were in the region of £208,200. The average amount of ground rent was £65 billed monthly. The lease ended in 2082. Taking into account 61 years unexpired we estimated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 exclusive of fees.