There is no doubt about it a leasehold property in Soho is a wasting asset as a result of the shortening lease. If the residual term has, over 125 years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has less than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main logic behind why you should consider extending without delay. Many flat owners in Soho will qualify for this right; that being said a conveyancer will be able to advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold residencies in Soho with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Soho,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Soho valuers.
Following unsuccessful discussions with the landlord of her first floor apartment in Soho, Georgina commenced the lease extension process just as her lease was coming close to the crucial eighty-year threshold. The lease extension completed in June 2008. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. T Baker took over the lease of a recently refurbished apartment in Soho in November 2008. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Identical flats in Soho with an extended lease were valued around £295,000. The mid-range ground rent payable was £45 billed annually. The lease elapsed on 7 January 2099. Having 74 years remaining we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Soho premises is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case was in relation to 1 flat. The unexpired term was 73.26 years.