For anyone whose Mayfair property is held on a long lease, the message is clear – if you do nothing, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Mayfair can be a difficult process. We recommend you get professional help from a conveyancer and valuer with experience in this area.
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 in-depth market knowledge procuring Mayfair lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
William was the the leasehold proprietor of a high value flat in Mayfair on the market with a lease of just over 72 years left. William on an informal basis approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were William to exercise his statutory right. William procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Dr Anna Lefebvre owned a ground floor apartment in Mayfair in May 2008. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical flats in Mayfair with a long lease were worth £245,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease finished on 9 June 2093. Given that there were 68 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.
An example of a Lease Extension matter before the tribunal 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 affected 1 flat. The unexpired term as at the valuation date was 21 years.