There is no doubt about it a leasehold property in Earls Court is a wasting asset as a result of the shortening lease. Where the lease has, over 99 years remaining then this decrease may be fractional however there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main reason why you should consider extending sooner than later. Many flat owners in Earls Court will meet the qualifying criteria; that being said a lawyer can advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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 |
| 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 will provide you enhanced control over the value of your Earls Court leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Nathan owned a 2 bedroom flat in Earls Court on the market with a lease of fraction over sixty years outstanding. Nathan informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Nathan to exercise his statutory right. Nathan procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Last February we were e-mailed by Dr H Ali , who took over the lease of a studio flat in Earls Court in February 2006. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Comparable properties in Earls Court with a long lease were in the region of £275,000. The average amount of ground rent was £55 invoiced yearly. The lease terminated in 2101. Considering the 76 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Earls Court premises is 5 Wetherby Gardens in June 2014. the Tribunal concluded that the price to be paid for the freehold of the property was £2,369,452. This case related to 5 flats. The remaining number of years on the lease was 38.98 years.