It’s an underpublicised truth that a Chinnor residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Chinnor property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining drops under 80 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 additional value that a lease extension will add the property The majority of leasehold owners in Chinnor will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes 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 premises in Chinnor with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Chinnor lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Subsequent to unsuccessful correspondence with the freeholder of her purpose-built apartment in Chinnor, Shannon commenced the lease extension process just as her lease was coming close to the critical 80-year mark. The legal work was finalised in February 2005. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were contacted by Mr M Howard who, having moved into a first floor flat in Chinnor in July 1997. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Similar residencies in Chinnor with a long lease were in the region of £181,600. The average ground rent payable was £55 invoiced yearly. The lease terminated in 2077. Considering the 52 years remaining we approximated the premium to the landlord to extend the lease to be between £30,400 and £35,200 plus legals.
In 2010 we were contacted by Dr J Miller who, having owned a one bedroom apartment in Chinnor in October 2012. The dilemma was if we could estimate the price would be to prolong the lease by 90 years. Similar premises in Chinnor with 100 year plus lease were worth £290,000. The average ground rent payable was £45 invoiced annually. The lease concluded in 2097. Considering the 72 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of fees.