It’s an underpublicised truth that a Belgravia residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Belgravia property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Belgravia will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Belgravia,the lease extension solicitors 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 Belgravia valuers.
During the course of the last few months Isaac, came precariously near to the 80-year threshold with the lease on his leasehold apartment in Belgravia. Having bought his home two decades ago, the lease term was of minimal bearing. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Isaac extended the lease just under the wire last August. Isaac and the landlord who owned the flat above ultimately settled on a premium of £6,000 . If he had missed the deadline, the premium would have become more costly by at least £950.
Last September we were e-mailed by Mr and Mrs. U Murphy , who purchased a garden apartment in Belgravia in March 1996. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar properties in Belgravia with a long lease were worth £255,000. The average ground rent payable was £50 billed per annum. The lease concluded on 9 April 2096. Given that there were 71 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus professional charges.
An example of a Lease Extension case for a Belgravia flat is Flat 3 47 Cadogan Square in December 2010. the Tribunal determined that the premium payable to the landord by the leaseholder for the lease extension was £732,935 This case was in relation to 1 flat. The remaining number of years on the lease was 13.33 years.