Unfortunately that a Piccadilly residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Piccadilly property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining drops under 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 flat owners in Piccadilly will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Piccadilly can be a difficult process. We recommend you secure professional help from a conveyancer and surveyor 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 Piccadilly lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Leon owned a 2 bedroom apartment in Piccadilly being marketed with a lease of fraction over sixty years unexpired. Leon on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Leon to invoke his statutory right. Leon procured expert legal guidance and secured an acceptable deal informally and sell the property.
In 2009 we were phoned by Ms Charlotte Murphy who, having owned a one bedroom flat in Piccadilly in November 1997. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by 90 years. Comparative flats in Piccadilly with an extended lease were worth £227,800. The average amount of ground rent was £45 collected yearly. The lease ran out on 11 September 2089. Having 65 years remaining we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 plus fees.
An example of a Lease Extension matter before the tribunal for a Piccadilly 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.