When it comes to domestic leasehold premises in Soho, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Leasehold owners in Soho with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. When a lease has under eighty years outstanding, under the current statute the landlord can calculate and demand a greater premium, assessed on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a property with more than one hundred years unexpired lease term 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 in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Soho,the lease extension solicitors 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.
After protracted discussions with the freeholder of her ground floor apartment in Soho, Naomi commenced the lease extension process just as her lease was nearing the crucial 80-year mark. The transaction completed in July 2010. The landlord’s costs were kept to an absolute minimum.
Dr Hugo Richardson purchased a ground floor flat in Soho in March 2008. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Comparable properties in Soho with an extended lease were worth £208,600. The average ground rent payable was £60 collected annually. The lease expiry date was on 4 April 2083. Given that there were 57 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 not including expenses.
An example of a Freehold Enfranchisement decision for a Soho property 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 related to 1 flat. The unexpired residue of the current lease was 73.26 years.