Battersea leases on domestic deteriorating in value. Where your lease has in the region of 90 years left, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Battersea will usually be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In some cases you may not qualify. There are prescribed deadlines and steps to comply with once the process has started so it’s best to be guided by a lawyer during the process.
Leasehold premises in Battersea with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Battersea leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Muhammad, came dangerously close to the 80-year mark with the lease on his ground floor apartment in Battersea. In buying his flat 18 years previously, the unexpired term was of minimal importance. As luck would have it, he became aware that he needed to take steps soon on Extending the lease. Muhammad arranged for a lease extension at the eleventh hour last January. Muhammad and the landlord who owned the flat above ultimately agreed on a premium of £6,000 . If the lease had slipped to less than 80 years, the price would have become more exhorbitant by a minimum £950.
Last year we were approach by Mr and Mrs. S Simon , who took over the lease of a studio flat in Battersea in October 2001. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparable homes in Battersea with a long lease were worth £260,000. The average ground rent payable was £50 collected quarterly. The lease terminated on 11 January 2096. Given that there were 71 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension case for a Battersea flat is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The unexpired term as at the valuation date was 57.06 years.