The market value of Belgravia leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is less than eighty years
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service gives you better control over the value of your Belgravia leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Caleb owned a 2 bedroom flat in Belgravia on the market with a lease of a few days over 72 years remaining. Caleb on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Caleb to invoke his statutory right. Caleb obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
Mrs M Rogers bought a one bedroom apartment in Belgravia in February 2009. The question was if we could estimate the price could be to prolong the lease by a further 90 years. Comparative premises in Belgravia with 100 year plus lease were valued about £242,600. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease concluded on 28 February 2093. Considering the 67 years left we approximated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 not including fees.
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 term as at the valuation date was 13.33 years.