For anyone whose Chorley property is held on a long lease, our message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 better control over the value of your Chorley leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Noah, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Chorley. In buying his property 18 years previously, the unexpired term was of little interest. As luck would have it, he recognised he needed to take action soon on a lease extension. Noah arranged for a lease extension just under the wire last January. Noah and the freeholder ultimately agreed on an amount of £5,000 . If he had missed the deadline, the premium would have increased by at least £950.
Last Christmas we were phoned by Mr and Mrs. U Bonnet , who bought a basement apartment in Chorley in January 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Similar properties in Chorley with an extended lease were worth £225,800. The average ground rent payable was £60 billed monthly. The lease elapsed on 9 January 2085. Taking into account 60 years outstanding we calculated the compensation to the landlord for the lease extension to be within £25,700 and £29,600 exclusive of fees.
Last month we were phoned by Mr and Mrs. Y Petit , who took over the lease of a studio apartment in Chorley in May 2005. The question was if we could estimate the premium could be to extend the lease by ninety years. Comparable properties in Chorley with an extended lease were worth £210,000. The mid-range ground rent payable was £50 collected monthly. The lease finished in 2105. Taking into account 80 years left we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.