Pimlico leases on residential deteriorating in value. if your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for a lease extension to be in place before the term of the existing lease dips under eighty years - otherwise a higher premium will be payable. Leasehold owners in Pimlico will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In some circumstances you may not qualify. There are prescribed deadlines and formalities to follow once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
Leasehold premises in Pimlico with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
The lawyers that we work with handle Pimlico lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Half a year ago Milo, came very near to the eighty-year threshold with the lease on his basement flat in Pimlico. In buying his flat 18 years ago, the unexpired term was of minimal significance. Thankfully, he became aware that he needed to take action soon on a lease extension. Milo arranged for a lease extension just ahead of time last May. Milo and the landlord who owned the flat above in the end settled on a premium of £5,500 . If he had missed the deadline, the price would have gone up by at least £1,050.
Dr Luke Jones owned a one bedroom flat in Pimlico in August 2007. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Identical properties in Pimlico with an extended lease were valued about £208,600. The mid-range ground rent payable was £60 collected quarterly. The lease ran out in 2083. Having 57 years outstanding we estimated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of professional charges.
An example of a Lease Extension case 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 affected 2 flats. The unexpired term as at the valuation date was 56 years.