Chulmleigh leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Chulmleigh residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Chulmleigh you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Chulmleigh with over one hundred years outstanding on the lease are sometimes 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 buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | 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. |
| 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. |
Retaining our service gives you increased control over the value of your Chulmleigh leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted discussions with the freeholder of her one bedroom flat in Chulmleigh, Ellie started the lease extension process as the eighty year mark was swiftly coming. The legal work was concluded in March 2015. The landlord’s charges were kept to an absolute minimum.
Last May we were e-mailed by Mr and Mrs. P Garcia , who moved into a purpose-built apartment in Chulmleigh in February 1995. The question was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparable homes in Chulmleigh with an extended lease were valued around £280,000. The average ground rent payable was £45 invoiced yearly. The lease ended in 2094. Having 69 years unexpired we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus fees.
In 2009 we were phoned by Dr Nathan Nelson who, having completed a basement flat in Chulmleigh in May 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Similar premises in Chulmleigh with an extended lease were worth £216,000. The mid-range amount of ground rent was £60 collected monthly. The lease ended in 2083. Taking into account 58 years remaining we approximated the premium to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of costs.