Earls Court leases on domestic properties are gradually losing value. Where your lease has about ninety years left, you should start considering the need for a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you start paying an additional element called marriage value. Flat owners in Earls Court will usually qualify for a lease extension; however a solicitor will confirm if you qualify. In some circumstances you may not qualify. There are prescribed timetables and formalities to comply with once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Earls Court leasehold, as your property will be more valuable and marketable in respect of lease length should you decide 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.
Luca owned a studio flat in Earls Court on the market with a lease of fraction over 61 years left. Luca informally contacted his landlord a well known London-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 a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Luca to exercise his statutory right. Luca obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Dr Mia Scott acquired a first floor apartment in Earls Court in October 2002. We are asked if we could estimate the price would be to extend the lease by an additional years. Comparative properties in Earls Court with 100 year plus lease were in the region of £280,000. The average ground rent payable was £55 collected yearly. The lease expired on 20 October 2104. Considering the 78 years outstanding we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of fees.
An example of a Freehold Enfranchisement case for a Earls Court premises 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 related to 5 flats. The remaining number of years on the lease was 38.98 years.