When it comes to long leasehold premises in Belgravia, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially once there are less than eighty years remaining. Leasehold owners in Belgravia with a lease approaching 81 years remaining should seriously consider extending it without delay. Once a lease has less than 80 years outstanding, under the current statute the freeholder can calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold properties in Belgravia with over 100 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 to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
The conveyancing solicitors 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 conveyancer we work with provide it.
Cameron owned a studio flat in Belgravia being marketed with a lease of fraction over fifty eight years outstanding. Cameron informally approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Cameron to exercise his statutory right. Cameron procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Christmas we were called by Dr J Rivera , who owned a one bedroom apartment in Belgravia in November 1997. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable residencies in Belgravia with a long lease were in the region of £168,800. The average amount of ground rent was £60 collected quarterly. The lease elapsed in 2080. Taking into account 55 years as a residual term we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus fees.
An example of a Lease Extension decision 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 unexpired term as at the valuation date was 13.33 years.