It’s a harsh certainty that a Chislehurst 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 loss of value being disguised by increases in the Chislehurst property market.Once your lease nears 85ish years, you should start considering a lease extension. If lease term drops below 80 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. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Chislehurst will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Chislehurst with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Chislehurst leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Blake, started to get close to the 80-year mark with the lease on his basement flat in Chislehurst. In buying his property two decades ago, the unexpired term was of minimal bearing. Thankfully, he recognised he would imminently be paying an inflated amount for a lease extension. Blake arranged for a lease extension just under the wire last June. Blake and the landlord eventually settled on the final figure of £5,500 . If the lease had descended lower than 80 years, the amount would have escalated by a minimum £900.
In 2009 we were approached by Mrs Madeleine Hernández who, having moved into a studio flat in Chislehurst in April 2010. The dilemma was if we could approximate the price would be to prolong the lease by an additional years. Identical properties in Chislehurst with a long lease were valued about £240,600. The average ground rent payable was £60 invoiced annually. The lease elapsed on 24 July 2087. Considering the 62 years remaining we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 not including costs.
An example of a Lease Extension matter before the tribunal for a Chislehurst premises is 70 Andace Park Gardens 133-149 Widmore Road in November 2013. Tribunal determined that the premium payable for the lease extension was £10,052 This case affected 1 flat. The unexpired residue of the current lease was 72 years.