Battersea leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Battersea residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Battersea you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Battersea with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
Retaining our service will provide you increased control over the value of your Battersea leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the landlord of her garden flat in Battersea, Chantelle started the lease extension process as the eighty year mark was rapidly approaching. The lease extension completed in April 2013. The landlord’s charges were negotiated to less than 550 pounds.
Last October we were approach by Mr and Mrs. R Pérez , who completed a studio apartment in Battersea in February 1995. We are asked if we could estimate the price would be for a ninety year lease extension. Identical residencies in Battersea with a long lease were valued around £235,200. The average ground rent payable was £45 collected yearly. The lease came to a finish in 2092. Taking into account 66 years outstanding we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus costs.
An example of a Lease Extension case for a Battersea premises 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 related to 1 flat. The unexpired term was 57.06 years.