When it comes to long leasehold premises in Chinnor, you are actually buying a right to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than eighty years remaining. Leasehold owners in Chinnor with a lease nearing 81 years left should seriously consider extending it as soon as possible. When a lease has fewer than 80 years left, under the current Act the landlord can calculate and charge a larger premium, based on a technical computation, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
The conveyancing solicitors 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.
Michael owned a 2 bedroom flat in Chinnor on the market with a lease of a few days over 59 years remaining. Michael informally approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and was able to make an informed decision and deal with the matter and readily saleable.
In 2012 we were called by Mr and Mrs. P Bell who, having purchased a purpose-built apartment in Chinnor in February 2005. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparative residencies in Chinnor with a long lease were worth £280,000. The mid-range ground rent payable was £45 invoiced per annum. The lease expiry date was in 2095. Taking into account 69 years remaining we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus expenses.
In 2009 we were e-mailed by Mr and Mrs. F Morel who, having owned a basement flat in Chinnor in April 2003. We are asked if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Identical premises in Chinnor with an extended lease were valued around £216,000. The average amount of ground rent was £60 invoiced yearly. The lease elapsed in 2084. Taking into account 58 years unexpired we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of expenses.