It’s a harsh certainty that a Mayfair residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Mayfair property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Mayfair will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Mayfair with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Mayfair lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Oliver owned a high value apartment in Mayfair on the market with a lease of a few days over sixty years left. Oliver informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Oliver to exercise his statutory right. Oliver 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.
Mr and Mrs. Y Díaz bought a studio apartment in Mayfair in August 2010. We are asked if we could approximate the price would be for a 90 year lease extension. Similar flats in Mayfair with an extended lease were in the region of £200,800. The average amount of ground rent was £65 billed quarterly. The lease finished in 2085. Considering the 60 years as a residual term we estimated the premium to the landlord for the lease extension to be within £20,900 and £24,200 plus legals.
An example of a Lease Extension case for a Mayfair flat 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 was in relation to 1 flat. The unexpired residue of the current lease was 21 years.