Mayfair leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Mayfair residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Mayfair you should see if your lease has between seventy and ninety years left. There are compelling reasons why a Mayfair leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold premises in Mayfair with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Lease extensions in Mayfair can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Mayfair lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Tommy, started to get close to the 80-year threshold with the lease on his leasehold flat in Mayfair. Having purchased his flat twenty years ago, the lease term was of minimal importance. Luckily, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Tommy arranged for a lease extension at the eleventh hour in July. Tommy and the landlord in the end settled on sum of £6,000 . If he not met the deadline, the sum would have escalated by a minimum £975.
Mr and Mrs. T Brooks moved into a newly refurbished apartment in Mayfair in November 2001. The question was if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Identical premises in Mayfair with an extended lease were valued about £275,000. The mid-range ground rent payable was £55 invoiced per annum. The lease lapsed in 2103. Taking into account 77 years left we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.
An example of a Lease Extension decision for a Mayfair residence 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 number of years remaining on the existing lease(s) was 21 years.