The re-sale value of a leasehold property in Chessington depends on how long the lease has remaining. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years to run so that all matters can be concluded well before the 80 year threshold. Current legislation enables Chessington qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Chessington with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Chelsea 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. |
| 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. |
The lawyers that we work with undertake Chessington 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 conveyancing solicitor we work with provide it.
Last Christmas Hugo, came dangerously near to the eighty-year mark with the lease on his two bedroom apartment in Chessington. In buying his flat two decades ago, the length of the lease was of no significance. As luck would have it, it dawned on him that he needed to take action soon on a lease extension. Hugo extended the lease at the eleventh hour last July. Hugo and the landlord who owned the flat above in the end settled on sum of £5,500 . If he failed to meet the deadline, the amount would have become more costly by a minimum £1,075.
Mr and Mrs. D Martínez bought a studio flat in Chessington in April 1998. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar premises in Chessington with a long lease were in the region of £250,000. The average ground rent payable was £50 invoiced every twelve months. The lease finished on 3 June 2095. Given that there were 69 years remaining we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
An example of a Lease Extension matter before the tribunal for a Chessington premises is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case related to 1 flat.