The market value of a leasehold property in Chester is impacted by how long the lease has remaining. If it is close to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to commence the lease extension process when a lease still has 82 years unexpired so that a lease extension can be addressed ahead of the eighty year threshold. Current legislation enables Chester qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Engaging our service will provide you increased control over the value of your Chester leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Michael owned a conversion flat in Chester being sold with a lease of fraction over fifty eight years outstanding. Michael on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Michael to invoke his statutory right. Michael obtained expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
In 2011 we were e-mailed by Dr Abigail Garcia who, having took over the lease of a newly refurbished apartment in Chester in May 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative homes in Chester with 100 year plus lease were valued around £275,000. The mid-range amount of ground rent was £45 billed yearly. The lease ended in 2094. Taking into account 68 years left we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Last year we were e-mailed by Mr and Mrs. V Martinez , who moved into a garden apartment in Chester in July 2011. The question was if we could estimate the price would be to prolong the lease by ninety years. Comparative premises in Chester with a long lease were in the region of £216,000. The average amount of ground rent was £60 collected yearly. The lease came to a finish on 8 January 2084. Having 58 years remaining we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 not including professional charges.