Unfortunately that a Chester residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Chester property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be payable. Most flat owners in Chester will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
Leasehold residencies in Chester with in excess of 100 years unexpired on the lease are often referred to as ‘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 upside in purchasing the reversionary interest 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Chester can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Chester lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last Summer Noah, came seriously near to the 80-year threshold with the lease on his one bedroom flat in Chester. In buying his property two decades ago, the lease term was of no importance. Fortunately, he recognised he needed to take action soon on Extending the lease. Noah extended the lease just in the nick of time last August. Noah and the landlord eventually settled on a premium of £6,000 . If he had missed the deadline, the premium would have escalated by a minimum £875.
Mr and Mrs. Y Bernard owned a studio flat in Chester in May 1995. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative homes in Chester with an extended lease were in the region of £295,000. The average amount of ground rent was £45 invoiced quarterly. The lease elapsed in 2099. Given that there were 74 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus expenses.
In 2009 we were phoned by Ms N Clark who, having was assigned a lease of a one bedroom flat in Chester in September 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparative homes in Chester with an extended lease were in the region of £248,000. The average amount of ground rent was £65 billed monthly. The lease lapsed in 2088. Taking into account 63 years as a residual term we approximated the premium to the landlord to extend the lease to be within £20,900 and £24,200 not including fees.