Mayfair leases on residential properties are gradually losing value. Where your lease has in the region of ninety years left, you should start considering the need for a lease extension. If lease term is under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Mayfair will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to check if you qualify. In certain situations you may not qualify. There are prescribed timetables and procedures to comply with once the process has commenced so it’s prudent to be guided by a lawyer during the process.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Mayfair,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mayfair valuers.
After protracted negotiations with the landlord of her first floor flat in Mayfair, Ellen started the lease extension process as the 80 year threshold was rapidly coming. The lease extension was concluded in October 2005. The freeholder’s charges were kept to an absolute minimum.
Last month we were called by Mrs Millie López , who purchased a first floor apartment in Mayfair in May 2009. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable flats in Mayfair with a long lease were worth £193,400. The average ground rent payable was £65 invoiced per annum. The lease finished on 20 May 2085. Having 59 years outstanding we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 plus professional charges.
An example of a Lease Extension decision for a Mayfair property is Flat 1 3 Upper Belgrave Street in December 2010. The Tribunal determined that the price payablefor the Lease extension in respect of the subject premises was £2,202,007 This case related to 1 flat. The unexpired term was 21 years.