Unfortunately that a Chislehurst residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Chislehurst property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips under 80 years, you will end up paying 50% 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 flat owners in Chislehurst will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Chislehurst with over 100 years outstanding on the lease are sometimes referred to as ‘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 to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 procure Chislehurst 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 conveyancer we work with provide it.
In the wake of 9 months of unsuccessful negotiations with the freeholder of her ground floor flat in Chislehurst, Lauren commenced the lease extension process as the 80 year deadline was fast nearing. The lease extension was finalised in June 2005. The freeholder’s charges were kept to an absolute minimum.
In 2011 we were called by Dr P Walker who, having purchased a one bedroom flat in Chislehurst in September 2010. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical residencies in Chislehurst with a long lease were valued about £191,400. The mid-range ground rent payable was £55 billed quarterly. The lease finished in 2079. Considering the 54 years left we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 plus legals.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired lease term was 72 years.