It’s a harsh truth that a Chelsfield residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Chelsfield property prices.Where your lease has approximately 90 years left, you should start thinking about 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 slips lower than eighty years - otherwise a higher premium will be payable. The majority of flat owners in Chelsfield will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timeframes 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 conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Chelsfield leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful negotiations with the landlord of her studio flat in Chelsfield, Jennifer commenced the lease extension process just as the lease was coming close to the all-important 80-year threshold. The legal work was concluded in February 2005. The landlord’s costs were kept to an absolute minimum.
Last Summer we were contacted by Mr and Mrs. H Bell , who moved into a one bedroom flat in Chelsfield in August 2012. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar residencies in Chelsfield with a long lease were valued around £290,000. The average ground rent payable was £45 invoiced monthly. The lease elapsed on 17 March 2098. Considering the 73 years remaining we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
An example of a Lease Extension case for a Chelsfield flat is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The unexpired term was 50.57 years.