The re-sale value of a leasehold property in Battersea depends on how long the lease has left to run. If it is close to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years to run so that all matters can be finalised well before the 80 year threshold. Leasehold Reform legislation enables Battersea qualifying lessees to obtain a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for decades to come.
| 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; |
| Birmingham Midshires | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you increased control over the value of your Battersea leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Alfie, came dangerously close to the eighty-year mark with the lease on his leasehold apartment in Battersea. Having bought his flat two decades ago, the length of the lease was of no relevance. As luck would have it, he recognised he needed to take steps soon on a lease extension. Alfie extended the lease just ahead of time last September. Alfie and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If he not met the deadline, the sum would have become more costly by a minimum £1,100.
In 2009 we were contacted by Mr E Stewart who, having took over the lease of a basement flat in Battersea in February 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Battersea with an extended lease were worth £242,600. The average amount of ground rent was £45 invoiced monthly. The lease concluded in 2092. Given that there were 67 years unexpired we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 plus legals.
An example of a Lease Extension decision for a Battersea residence is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The unexpired lease term was 57.06 years.