The value of Chester leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the unexpired lease term is below than 80 years
Leasehold residencies in Chester with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased 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 lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Rory, started to get near to the eighty-year threshold with the lease on his purpose- built apartment in Chester. In buying his flat 19 years previously, the lease term was of little relevance. Luckily, he recognised he needed to take action soon on a lease extension. Rory extended the lease at the eleventh hour in August. Rory and the freeholder ultimately settled on an amount of £6,000 . If he had missed the deadline, the sum would have become more costly by at least £1,150.
Last month we were phoned by Mr and Mrs. S Girard , who acquired a recently refurbished apartment in Chester in January 2007. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Identical properties in Chester with an extended lease were valued around £285,000. The average ground rent payable was £45 invoiced yearly. The lease came to a finish on 21 November 2096. Given that there were 71 years as a residual term we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.
In 2009 we were e-mailed by Mr and Mrs. I Wood who, having acquired a purpose-built flat in Chester in April 2010. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparable residencies in Chester with a long lease were in the region of £230,800. The average amount of ground rent was £60 billed every twelve months. The lease ran out in 2085. Considering the 60 years as a residual term we calculated the premium to the landlord to extend the lease to be between £24,700 and £28,600 not including legals.