The re-sale value of a leasehold property in Chilwell depends on how long the lease has left to run. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that all matters can be addressed ahead of the eighty year threshold. Leasehold Reform legislation enables Chilwell qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years in the future.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service gives you better control over the value of your Chilwell leasehold, as your property will be more valuable and saleable in respect 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.
Last year Jamie, started to get close to the eighty-year mark with the lease on his studio apartment in Chilwell. Having purchased his flat 19 years previously, the unexpired term was of no bearing. As luck would have it, he noticed he needed to take steps soon on Extending the lease. Jamie was able to extend his lease at the eleventh hour last April. Jamie and the landlord who owned the flat above subsequently settled on an amount of £5,000 . If he not met the deadline, the price would have gone up by at least £950.
Last Autumn we were e-mailed by Mr and Mrs. J Lewis , who owned a studio flat in Chilwell in September 1998. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparable residencies in Chilwell with 100 year plus lease were worth £235,200. The mid-range amount of ground rent was £45 billed quarterly. The lease finished on 3 April 2091. Considering the 66 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including costs.
Last month we were contacted by Mr Joshua Rivera , who bought a studio apartment in Chilwell in June 2006. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable properties in Chilwell with a long lease were valued around £275,000. The mid-range amount of ground rent was £55 billed annually. The lease lapsed on 25 November 2102. Considering the 77 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus fees.