With a long leasehold premises in Earls Court, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably when there are less than 80 years remaining. Leasehold owners in Earls Court with a lease approaching 81 years remaining should seriously think of extending it without delay. Once the lease term has less than 80 years left, under the relevant Act the landlord is entitled to calculate and levy a greater amount, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold properties in Earls Court with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Using our service gives you better control over the value of your Earls Court leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Lucas owned a high value flat in Earls Court on the market with a lease of a few days over fifty eight years remaining. Lucas on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. No ground rent would be due on a lease extension were Lucas to exercise his statutory right. Lucas procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Dr D Watson bought a one bedroom apartment in Earls Court in February 2005. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative premises in Earls Court with a long lease were worth £256,600. The average amount of ground rent was £60 collected yearly. The lease ended on 18 January 2077. Considering the 52 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Earls Court residence is 5 Wetherby Gardens in June 2014. the Tribunal concluded that the price to be paid for the freehold of the property was £2,369,452. This case was in relation to 5 flats. The unexpired residue of the current lease was 38.98 years.