Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Chippenham. Clearly, the term of lease left reduces over time. This may pass by relatively unnoticed when the residence needs to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Chippenham have the legal entitlement to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Do give due attention before putting off your Chippenham lease extension. Holding off the cost now only increases the price you will ultimately incur for a lease extension
Leasehold properties in Chippenham with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Chippenham 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 lawyer we work with provide it.
Last October Eli, came very near to the 80-year mark with the lease on his first floor apartment in Chippenham. In buying his property 18 years previously, the unexpired term was of minimal concern. Thankfully, he noticed he needed to take action soon on Extending the lease. Eli was able to extend his lease at the eleventh hour in September. Eli and the freeholder via the managing agents eventually settled on an amount of £5,500 . If the lease had dipped below 80 years, the figure would have increased by at least £1,100.
Last Autumn we were called by Dr L Pérez , who completed a studio flat in Chippenham in August 1997. The dilemma was if we could approximate the premium could be to prolong the lease by 90 years. Comparable flats in Chippenham with 100 year plus lease were in the region of £168,800. The average amount of ground rent was £60 invoiced monthly. The lease end date was in 2081. Given that there were 55 years remaining we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including legals.
Mr J Flores was assigned a lease of a purpose-built flat in Chippenham in September 2000. The question was if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Identical residencies in Chippenham with 100 year plus lease were worth £235,200. The mid-range ground rent payable was £45 invoiced yearly. The lease finished in 2092. Taking into account 66 years unexpired we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including legals.