It’s a harsh truth that a Chesterfield residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Chesterfield property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term drops below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Chesterfield will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally accepted that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Chesterfield,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Chesterfield valuers.
Subsequent to unsuccessful correspondence with the freeholder of her studio flat in Chesterfield, Alexandra commenced the lease extension process just as her lease was approaching the all-important 80-year threshold. The transaction was finalised in May 2011. The freeholder’s fees were restricted to under 550 GBP.
Mr and Mrs. O Jackson acquired a ground floor apartment in Chesterfield in May 2004. We are asked if we could approximate the price would be for a ninety year extension to my lease. Identical homes in Chesterfield with 100 year plus lease were worth £166,400. The mid-range amount of ground rent was £60 billed annually. The lease end date was in 2080. Considering the 54 years remaining we approximated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 not including fees.
In 2011 we were e-mailed by Mr and Mrs. W Davis who, having purchased a garden flat in Chesterfield in July 1996. We are asked if we could estimate the price would be to extend the lease by a further 90 years. Comparative premises in Chesterfield with an extended lease were valued about £227,800. The mid-range ground rent payable was £45 invoiced every twelve months. The lease terminated in 2091. Having 65 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.