The market value of a leasehold property in Chester le Street depends on how long the lease has left to run. If it is close to or less than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that all matters can be finalised prior to the eighty year cut off point. Current legislation enables Chester le Street qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Chester le Street leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Connor was the the leasehold proprietor of a studio flat in Chester le Street on the market with a lease of a few days over 59 years unexpired. Connor informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Connor to exercise his statutory right. Connor obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Mr and Mrs. Y García purchased a one bedroom flat in Chester le Street in October 1996. The question was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Identical residencies in Chester le Street with a long lease were worth £265,000. The average amount of ground rent was £50 collected per annum. The lease ended on 11 March 2098. Taking into account 73 years left we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.
Last Spring we were contacted by Mr and Mrs. D Carter , who purchased a ground floor apartment in Chester le Street in June 2002. The question was if we could shed any light on how much (approximately) price would likely be to extend the lease by 90 years. Comparative flats in Chester le Street with a long lease were in the region of £264,000. The mid-range ground rent payable was £60 collected quarterly. The lease end date was on 1 September 2078. Given that there were 53 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 plus fees.