Mayfair leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Mayfair residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Mayfair you must investigate if your lease has between seventy and 90 years left. There are good reasons why a Mayfair flat owner with a lease having around eighty years left should take action to ensure that a lease extension is effected without delay
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Mayfair,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mayfair valuers.
Last Winter Lucas, came very near to the 80-year mark with the lease on his ground floor flat in Mayfair. Having bought his flat two decades ago, the length of the lease was of no bearing. As luck would have it, he realised he would imminently be paying way over the odds for Extending the lease. Lucas arranged for a lease extension at the eleventh hour in August. Lucas and the freeholder via the management company in the end settled on a premium of £6,000 . If the lease had descended to less than 80 years, the price would have gone up by a minimum £975.
Last Spring we were contacted by Ms H Carter , who bought a garden apartment in Mayfair in August 1997. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Similar properties in Mayfair with a long lease were worth £210,600. The average amount of ground rent was £45 billed monthly. The lease expired in 2087. Given that there were 62 years unexpired we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of legals.
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 was in relation to 1 flat. The unexpired residue of the current lease was 21 years.