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Why you should start your Victoria lease extension


Why you should commence your Victoria lease extension today:

Increase your lease and increase your Victoria property value

There is no doubt about it a leasehold property in Victoria is a wasting asset as a result of the shortening lease. If the lease 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 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the primary logic behind why you should consider extending without delay. Most flat owners in Victoria will qualify for this right; however a conveyancer can confirm if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.

Victoria property with a lease extension has roughly the same value as a freehold

It is conventional wisdom 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 property will be equivalent in value to a freehold for many years ahead.

Banks and Building Societies may not lend with a short lease

The trend since 2008 has been for banks to tighten lending criteria generally - this has extended to the types of security over which the home loan is to be granted. This has meant the minimum number of years remaining under the lease required by mortgage companies has increased. Historically banks would grant a mortgage on a lease with 25 years plus the term of the loan - routinely fifty year leases but those requirements have been chipped away by the requirement for lengthy leases - many use a minimum term of 75 years as standard.

Lender Requirement
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.
Coventry Building Society 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.
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.
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
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.

What makes us experts in Victoria lease extensions?

The lawyers that we work with handle Victoria 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.

Victoria Lease Extension Example Cases:

Kate, Victoria, London,

Following lengthy negotiations with the landlord of her leasehold flat in Victoria, Kate initiated the lease extension process as the 80 year deadline was swiftly approaching. The transaction completed in July 2009. The landlord’s charges were negotiated to under 650 pounds.

Victoria case:

In 2010 we were contacted by Mr and Mrs. T Díaz who, having was assigned a lease of a first floor flat in Victoria in July 1998. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Similar properties in Victoria with a long lease were worth £265,000. The average ground rent payable was £50 billed every twelve months. The lease terminated on 24 March 2097. Given that there were 73 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.

Decision in Westminster

An example of a Lease Extension matter before the tribunal for a Victoria 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 was in relation to 2 flats. The unexpired residue of the current lease was 56 years.