As the length of the unexpired term of a Soho residential lease decreases so does its value and therefore the value of your property. If the lease has, over one hundred years to run then this decrease may be negligible however there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary rational as to why you should consider extending without delay. Many flat owners in Soho will qualify for this right; nevertheless a conveyancing solicitor can advise if 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.
It is generally accepted that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Soho can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Soho lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Hunter, started to get close to the eighty-year mark with the lease on his garden flat in Soho. In buying his flat two decades ago, the lease term was of no relevance. Thankfully, he noticed he would imminently be paying an escalated premium for a lease extension. Hunter was able to extend his lease just ahead of time last July. Hunter and the freeholder via the management company in the end settled on sum of £6,000 . If the lease had slid to less than eighty years, the sum would have increased by a minimum £900.
Last Spring we were phoned by Dr L Lefèvre , who bought a one bedroom apartment in Soho in March 2002. The dilemma was if we could estimate the price would be to extend the lease by ninety years. Comparable flats in Soho with 100 year plus lease were worth £290,000. The average ground rent payable was £45 invoiced yearly. The lease elapsed on 26 January 2099. Having 73 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus costs.
An example of a Freehold Enfranchisement case for a Soho residence 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 term as at the valuation date was 73.26 years.