The basic rule is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Covent Garden can extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Please give careful consideration before delaying your Covent Garden lease extension. Putting off that expense today simply escalates the premium you will ultimately have to pay to extend the lease.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Covent Garden can be a difficult process. We recommend you get guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Covent Garden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Harvey owned a conversion flat in Covent Garden being sold with a lease of just over fifty eight years unexpired. Harvey on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Harvey to invoke his statutory right. Harvey procured expert legal guidance and secured an acceptable resolution informally and sell the flat.
In 2009 we were approached by Mr F Hill who, having took over the lease of a one bedroom flat in Covent Garden in July 2011. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative homes in Covent Garden with a long lease were in the region of £208,200. The mid-range ground rent payable was £65 collected monthly. The lease ran out on 7 July 2087. Given that there were 61 years remaining we estimated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 not including professional charges.
An example of a Freehold Enfranchisement decision for a Covent Garden premises is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The unexpired residue of the current lease was 73.26 years.