It’s a harsh certainty that a Chelmsley Wood residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Chelmsley Wood property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining drops under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Chelmsley Wood will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Chelmsley Wood,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Chelmsley Wood valuers.
Evan was the the leasehold proprietor of a conversion apartment in Chelmsley Wood being marketed with a lease of a few days over 72 years left. Evan on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Evan to invoke his statutory right. Evan procured expert advice and was able to make an informed decision and handle with the matter and sell the flat.
In 2014 we were called by Ms S Collins who, having bought a basement flat in Chelmsley Wood in September 1995. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Similar properties in Chelmsley Wood with an extended lease were in the region of £250,000. The average amount of ground rent was £50 collected monthly. The lease ended on 11 November 2095. Considering the 69 years unexpired we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.
In 2010 we were approached by Mr and Mrs. F Sánchez who, having acquired a purpose-built flat in Chelmsley Wood in March 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Comparative residencies in Chelmsley Wood with an extended lease were in the region of £290,000. The average amount of ground rent was £60 billed quarterly. The lease expired in 2106. Having 80 years remaining we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.