Chester leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Chester tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Chester you would be well advised to see if your lease has between seventy and ninety years remaining. There are good reasons why a Chester leaseholder with a lease having around eighty years remaining should take action to make sure that a lease extension is actioned without delay
Leasehold residencies in Chester with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Chester 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.
Leo was the the leasehold owner of a high value apartment in Chester on the market with a lease of a little over 59 years left. Leo informally contacted his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Leo to invoke his statutory right. Leo procured expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Mr and Mrs. I Clark was assigned a lease of a purpose-built apartment in Chester in March 2000. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Comparable homes in Chester with a long lease were worth £181,600. The average ground rent payable was £55 invoiced yearly. The lease concluded in 2077. Having 52 years left we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 not including fees.
Dr Seth Bell purchased a basement apartment in Chester in January 2008. The question was if we could shed any light on how much (approximately) price would be to prolong the lease by a further 90 years. Similar properties in Chester with an extended lease were in the region of £290,000. The average ground rent payable was £45 invoiced annually. The lease concluded on 7 January 2097. Considering the 72 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.