It’s an underpublicised truth that a Cholsey residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Cholsey property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Cholsey will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Cholsey leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Elijah owned a conversion apartment in Cholsey being marketed with a lease of just over fifty eight years outstanding. Elijah informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Elijah to exercise his statutory right. Elijah procured expert advice and secured an acceptable deal informally and sell the flat.
Dr Harry Watson moved into a basement apartment in Cholsey in July 1996. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable residencies in Cholsey with 100 year plus lease were in the region of £237,600. The average ground rent payable was £45 invoiced every twelve months. The lease terminated in 2093. Taking into account 67 years left we estimated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of fees.
Last April we were contacted by Dr Archie Mason , who was assigned a lease of a first floor apartment in Cholsey in January 2006. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Similar properties in Cholsey with a long lease were valued around £280,000. The mid-range ground rent payable was £55 invoiced per annum. The lease elapsed in 2104. Considering the 78 years remaining we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.