As the length of the unexpired term of a Battersea domestic lease lessens so does its value and therefore the value of your property. If the residual term has, over one hundred years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should extend the lease sooner than later. The majority of flat owners in Battersea will qualify for this right; that being said a lawyer will be able to confirm whether you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Engaging our service will provide you enhanced control over the value of your Battersea leasehold, as your property will be more valuable and saleable in terms 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.
Jacob owned a conversion flat in Battersea on the market with a lease of a few days over 72 years remaining. Jacob on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be payable on a lease extension were Jacob to exercise his statutory right. Jacob procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last month we were e-mailed by Dr T Smith , who completed a one bedroom apartment in Battersea in August 2007. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar premises in Battersea with 100 year plus lease were valued about £183,600. The average amount of ground rent was £65 invoiced monthly. The lease concluded in 2081. Considering the 57 years remaining we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 plus costs.
An example of a Lease Extension matter before the tribunal 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 term was 57.06 years.