Pimlico leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Pimlico tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Pimlico you should see if your lease has between 70 and 90 years remaining. There are good reasons why a Pimlico leaseholder with a lease having around eighty years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold premises in Pimlico with more than 100 years unexpired 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 conveyancer we work with provide it.
Jake owned a conversion apartment in Pimlico on the market with a lease of fraction over 59 years outstanding. Jake informally spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jake to invoke his statutory right. Jake procured expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Ms Y Robinson owned a basement apartment in Pimlico in July 1996. We are asked if we could estimate the premium could be to prolong the lease by a further 90 years. Similar residencies in Pimlico with a long lease were valued about £200,000. The average ground rent payable was £50 billed yearly. The lease elapsed in 2103. Considering the 77 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including costs.
An example of a Lease Extension matter before the tribunal for a Pimlico residence 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 was 56 years.