It’s a harsh certainty that a Chelmsley Wood residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Chelmsley Wood property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term dips below eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Chelmsley Wood will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations 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 throughout the formalities.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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 enhanced control over the value of your Chelmsley Wood leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Riley, came seriously near to the eighty-year threshold with the lease on his ground floor flat in Chelmsley Wood. In buying his property twenty years ago, the lease term was of minimal bearing. Thankfully, he recognised he needed to take steps soon on a lease extension. Riley arranged for a lease extension at the eleventh hour in April. Riley and the freeholder via the managing agents ultimately settled on sum of £5,500 . If he not met the deadline, the sum would have escalated by at least £1,000.
Last Autumn we were phoned by Mr Luke Lewis , who took over the lease of a first floor flat in Chelmsley Wood in February 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by an additional years. Comparable homes in Chelmsley Wood with an extended lease were in the region of £183,600. The average ground rent payable was £65 invoiced every twelve months. The lease terminated in 2083. Having 57 years left we approximated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of legals.
Dr C Girard took over the lease of a first floor flat in Chelmsley Wood in May 2011. We are asked if we could approximate the price would be to extend the lease by an additional years. Comparative flats in Chelmsley Wood with 100 year plus lease were valued around £245,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease terminated on 11 November 2094. Taking into account 68 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.