The closer a residential lease in Chester nears to zero years unexpired, the more it reduces the value of the property. If the residual term has, in excess of 125 years to run then this decrease may be of little impact however there will become a point in time when a lease has fewer than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner as opposed to later. The majority of flat owners in Chester will meet the qualifying criteria; nevertheless a conveyancing solicitor can confirm if you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to 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. |
| 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; |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Using our service will provide you better control over the value of your Chester leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Joseph was the the leasehold proprietor of a conversion apartment in Chester on the market with a lease of just over 72 years outstanding. Joseph informally approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Joseph to exercise his statutory right. Joseph procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Mr and Mrs. B López owned a newly refurbished apartment in Chester in April 2005. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Similar homes in Chester with a long lease were worth £300,000. The mid-range amount of ground rent was £50 collected monthly. The lease finished in 2100. Having 75 years left we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.
Last Winter we were phoned by Ms Harriet David , who bought a first floor flat in Chester in August 1997. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Chester with an extended lease were valued around £250,400. The average amount of ground rent was £65 invoiced every twelve months. The lease finished on 20 August 2089. Taking into account 64 years remaining we calculated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 exclusive of legals.