Unfortunately that a Chipping Campden residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Chipping Campden property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term dips below eighty years, you will end up paying half 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 flat owners in Chipping Campden will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases 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 conveyancing solicitor throughout the process.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 lawyers that we work with undertake Chipping Campden 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.
After unsuccessful correspondence with the landlord of her ground floor flat in Chipping Campden, Rosie initiated the lease extension process as the eighty year mark was swiftly approaching. The legal work was finalised in April 2006. The freeholder’s charges were restricted to less than 450 pounds.
In 2014 we were phoned by Mrs Katie Roux who, having bought a one bedroom flat in Chipping Campden in August 2011. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Identical premises in Chipping Campden with an extended lease were worth £250,000. The mid-range amount of ground rent was £50 billed monthly. The lease terminated on 2 January 2096. Given that there were 70 years left we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2014 we were contacted by Mr and Mrs. O Thompson who, having owned a purpose-built flat in Chipping Campden in October 2007. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Comparable flats in Chipping Campden with a long lease were in the region of £246,800. The average amount of ground rent was £60 collected per annum. The lease termination date was on 9 July 2076. Considering the 50 years left we estimated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 not including professional charges.