Belgravia 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 your lease becomes more expensive. The majority of owners of residential leasehold property in Belgravia enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Belgravia you would be well advised to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Belgravia with in excess of 100 years left 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 upside in purchasing the freehold 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Belgravia lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Following unsuccessful negotiations with the landlord of her leasehold apartment in Belgravia, Rachael started the lease extension process as the eighty year threshold was rapidly advancing. The lease extension was concluded in September 2008. The landlord’s fees were restricted to approximately 650 GBP.
Ms M González bought a recently refurbished apartment in Belgravia in April 1997. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Identical flats in Belgravia with 100 year plus lease were in the region of £183,600. The mid-range amount of ground rent was £65 collected every twelve months. The lease finished in 2082. Given that there were 57 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including costs.
An example of a Lease Extension decision for a Belgravia residence 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 related to 1 flat. The unexpired term was 13.33 years.