With a long leasehold property in Belgravia, you are in fact renting it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably when there are less than 80 years remaining. Residents in Belgravia with a lease nearing 81 years left should seriously think of extending it sooner than later. When a lease has fewer than eighty years outstanding, under the current Act the freeholder is entitled to calculate and charge a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Belgravia with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Belgravia leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy negotiations with the landlord of her two bedroom flat in Belgravia, Elizabeth commenced the lease extension process as the eighty year deadline was quickly approaching. The lease extension completed in January 2012. The freeholder’s fees were negotiated to less than 500 GBP.
In 2012 we were contacted by Dr E Murphy who, having completed a one bedroom flat in Belgravia in November 2008. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical residencies in Belgravia with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 billed quarterly. The lease end date was in 2100. Taking into account 75 years remaining we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
An example of a Lease Extension case 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 residue of the current lease was 13.33 years.