Unfortunately that a Battersea residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Battersea property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining slips under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Battersea will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Battersea,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 Battersea valuers.
Following protracted correspondence with the landlord of her first floor flat in Battersea, Georgia started the lease extension process as the 80 year deadline was quickly advancing. The transaction was concluded in January 2013. The landlord’s costs were kept to an absolute minimum.
Last Spring we were e-mailed by Mr W Martinez , who took over the lease of a one bedroom apartment in Battersea in June 1996. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Identical flats in Battersea with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 collected monthly. The lease ran out in 2104. Considering the 79 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including legals.
An example of a Lease Extension decision 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 lease term was 57.06 years.