With a domestic leasehold premises in Chessington, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than 80 years left. Residents in Chessington with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. When the lease term has below 80 years remaining, under the relevant statute the landlord is entitled to calculate and charge a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Chessington lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last October Mason, came perilously near to the eighty-year threshold with the lease on his ground floor apartment in Chessington. In buying his flat two decades ago, the unexpired term was of no bearing. Luckily, he recognised he needed to take steps soon on Extending the lease. Mason extended the lease just under the wire in July. Mason and the landlord eventually settled on a premium of £6,000 . If he had missed the deadline, the premium would have escalated by at least £850.
Last Spring we were approach by Dr Leo Gray , who bought a studio apartment in Chessington in January 2007. The dilemma was if we could approximate the price would be to prolong the lease by a further 90 years. Similar properties in Chessington with a long lease were valued about £225,400. The mid-range ground rent payable was £45 billed annually. The lease expired on 12 May 2089. Given that there were 64 years unexpired we approximated the premium to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of professional charges.
An example of a Lease Extension decision for a Chessington flat is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case related to 1 flat.