When it comes to long leasehold property in Little Venice, you are actually buying a right to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than 80 years remaining. Leasehold owners in Little Venice with a lease drawing near to 81 years unexpired should seriously consider extending it without delay. When the lease term has under 80 years remaining, under the current statute the landlord can calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
The conveyancing solicitors that we work with undertake Little Venice 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 conveyancer we work with provide it.
Last Winter Aarav, started to get near to the 80-year mark with the lease on his garden flat in Little Venice. Having bought his property two decades ago, the unexpired term was of little interest. Luckily, he became aware that he needed to take steps soon on a lease extension. Aarav was able to extend his lease at the eleventh hour last May. Aarav and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If he had missed the deadline, the amount would have escalated by at least £1,050.
Dr Aiden Morgan took over the lease of a purpose-built apartment in Little Venice in November 2005. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Comparable homes in Little Venice with a long lease were worth £248,000. The average amount of ground rent was £65 billed yearly. The lease came to a finish in 2089. Taking into account 63 years unexpired we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 plus expenses.
In 2010 we were approached by Mr P Jones who, having took over the lease of a first floor flat in Little Venice in September 2005. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparative flats in Little Venice with a long lease were in the region of £181,600. The mid-range ground rent payable was £55 invoiced every twelve months. The lease came to a finish on 15 October 2078. Given that there were 52 years left we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of professional charges.