Pimlico 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 your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Pimlico residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Pimlico you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Pimlico leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Archie, started to get near to the eighty-year threshold with the lease on his first floor flat in Pimlico. Having bought his flat two decades ago, the unexpired term was of little importance. Fortunately, he realised he needed to take steps soon on Extending the lease. Archie was able to extend his lease just in the nick of time last July. Archie and the freeholder subsequently settled on sum of £5,000 . If the lease had dipped below 80 years, the sum would have escalated by at least £1,050.
Mrs G Carter bought a studio apartment in Pimlico in April 2006. We are asked if we could estimate the price would likely be for a ninety year lease extension. Similar homes in Pimlico with 100 year plus lease were in the region of £206,200. The mid-range ground rent payable was £60 billed every twelve months. The lease ran out on 10 February 2081. Having 56 years remaining we approximated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including fees.
An example of a Lease Extension decision for a Pimlico flat is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case was in relation to 2 flats. The unexpired term as at the valuation date was 56 years.