When it comes to residential leasehold property in City Of London, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy 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 increases markedly particularly once there are fewer than eighty years left. Leasehold owners in City Of London with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. When the lease term has under eighty years remaining, under the relevant legislation the freeholder is entitled to calculate and levy a greater premium, assessed on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | |
| Coventry Building Society | |
| Nationwide Building Society | |
| Royal Bank of Scotland | |
| Virgin |
The conveyancing solicitors that we work with procure City Of London 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 conveyancing solicitor we work with provide it.
Half a year ago Muhammad, started to get near to the 80-year threshold with the lease on his basement flat in City Of London. In buying his flat 18 years ago, the lease term was of no concern. Fortunately, it dawned on him that he would soon be paying an inflated amount for a lease extension. Muhammad extended the lease at the eleventh hour last January. Muhammad and the landlord who owned the flat above in the end settled on sum of £6,000 . If the lease had gone below 80 years, the amount would have increased by at least £1,100.
In 2013 we were approached by Mr and Mrs. N Moore who, having bought a one bedroom flat in City Of London in July 2007. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Identical flats in City Of London with a long lease were valued about £300,000. The mid-range amount of ground rent was £50 billed quarterly. The lease lapsed in 2102. Given that there were 76 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of costs.
Last Autumn we were approach by Dr G Bertrand , who owned a basement apartment in City Of London in May 1997. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in City Of London with an extended lease were in the region of £257,800. The average ground rent payable was £65 collected quarterly. The lease concluded on 15 February 2091. Given that there were 65 years remaining we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 not including professional charges.