Unfortunately that a Chesterton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Chesterton property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Chesterton will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
Lease extensions in Chesterton can be a difficult process. We recommend you obtain professional help from a lawyer and valuer 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 procuring Chesterton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Tyler was the the leasehold proprietor of a 2 bedroom flat in Chesterton being sold with a lease of just over 72 years outstanding. Tyler on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Tyler to exercise his statutory right. Tyler obtained expert advice and was able to make an informed decision and handle with the matter and sell the flat.
Last Winter we were contacted by Mr and Mrs. A Adams , who took over the lease of a recently refurbished apartment in Chesterton in March 2010. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Identical homes in Chesterton with an extended lease were valued about £218,400. The mid-range amount of ground rent was £60 billed quarterly. The lease concluded in 2084. Having 59 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £27,600 and £31,800 plus professional charges.
In 2010 we were e-mailed by Mr and Mrs. Y Gray who, having completed a first floor apartment in Chesterton in October 1995. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Comparable flats in Chesterton with a long lease were worth £205,000. The average amount of ground rent was £50 invoiced annually. The lease came to a finish on 17 February 2104. Having 79 years remaining we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.