When it comes to domestic leasehold premises in Covent Garden, you are actually purchasing a right to reside in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Leasehold owners in Covent Garden with a lease nearing 81 years left should seriously consider extending it without delay. Once a lease has below eighty years remaining, under the current Act the freeholder is entitled to calculate and charge a larger amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Covent Garden leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the freeholder of her studio flat in Covent Garden, Alice started the lease extension process as the 80 year threshold was swiftly approaching. The legal work was finalised in May 2007. The landlord’s charges were negotiated to a tad over 600 GBP.
In 2013 we were contacted by Dr I Laurent who, having bought a one bedroom apartment in Covent Garden in November 2012. The dilemma was if we could approximate the price would likely be for a 90 year extension to my lease. Comparative residencies in Covent Garden with 100 year plus lease were worth £191,000. The average amount of ground rent was £65 invoiced per annum. The lease ended in 2084. Considering the 58 years unexpired we calculated the premium to the freeholder to extend the lease to be within £23,800 and £27,400 not including fees.
An example of a Freehold Enfranchisement decision for a Covent Garden property 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 was in relation to 1 flat. The unexpired term was 73.26 years.