With a residential leasehold premises in Chester, you are actually purchasing an entitlement to live in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are less than eighty years remaining. Anyone in Chester with a lease drawing near to 81 years remaining should seriously consider extending it without delay. When the lease term has under eighty years outstanding, under the relevant Act the freeholder can calculate and demand a larger premium, based on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Chester with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Chester leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Dylan, started to get near to the 80-year threshold with the lease on his ground floor apartment in Chester. In buying his flat twenty years previously, the lease term was of minimal significance. Thankfully, he became aware that he would imminently be paying an escalated premium for Extending the lease. Dylan extended the lease just in the nick of time in January. Dylan and the freeholder via the management company in the end settled on sum of £5,000 . If he not met the deadline, the price would have become more exhorbitant by at least £1,050.
In 2012 we were called by Dr S André who, having was assigned a lease of a newly refurbished apartment in Chester in May 1995. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Similar flats in Chester with an extended lease were in the region of £198,800. The average amount of ground rent was £55 invoiced quarterly. The lease end date was in 2080. Having 55 years outstanding we calculated the premium to the landlord to extend the lease to be within £33,300 and £38,400 not including professional charges.
Ms Sophie Baker was assigned a lease of a one bedroom apartment in Chester in March 2007. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Identical flats in Chester with an extended lease were in the region of £300,000. The mid-range amount of ground rent was £50 invoiced annually. The lease finished on 19 April 2100. Given that there were 75 years outstanding we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.