With a long leasehold property in Belgravia, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years remaining. Leasehold owners in Belgravia with a lease nearing 81 years unexpired should seriously think of extending it without delay. Once a lease has less than 80 years left, under the current legislation the landlord can calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold premises in Belgravia with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service will provide you increased control over the value of your Belgravia leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Joseph, came precariously close to the 80-year threshold with the lease on his leasehold flat in Belgravia. Having purchased his flat two decades ago, the length of the lease was of little bearing. As luck would have it, he became aware that he needed to take action soon on a lease extension. Joseph arranged for a lease extension just in the nick of time in September. Joseph and the landlord subsequently agreed on sum of £5,500 . If the lease had slipped lower than eighty years, the sum would have increased by at least £1,025.
Last April we were approach by Mr and Mrs. D Richardson , who completed a garden flat in Belgravia in September 2001. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Identical flats in Belgravia with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 billed per annum. The lease termination date was in 2089. Taking into account 63 years remaining we estimated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 exclusive of legals.
An example of a Lease Extension decision for a Belgravia property 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 unexpired term as at the valuation date was 13.33 years.