With a domestic leasehold property in Little Venice, you are actually buying an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially when there are fewer than eighty years left. Anyone in Little Venice with a lease drawing near to 81 years unexpired should seriously consider extending it without delay. Once the lease term has under eighty years outstanding, under the relevant Act the freeholder can calculate and demand a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Little Venice,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Little Venice valuers.
In the wake of 6 months of lengthy correspondence with the freeholder of her studio flat in Little Venice, Natasha initiated the lease extension process just as her lease was nearing the critical eighty-year deadline. The lease extension was concluded in March 2013. The freeholder’s costs were kept to an absolute minimum.
Last Christmas we were e-mailed by Mr and Mrs. B Martinez , who acquired a garden apartment in Little Venice in November 2004. We are asked if we could estimate the price would be for a ninety year extension to my lease. Identical residencies in Little Venice with a long lease were in the region of £171,800. The average amount of ground rent was £55 collected per annum. The lease expired in 2075. Having 50 years remaining we calculated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of fees.
Last Winter we were contacted by Mr and Mrs. B Murphy , who purchased a first floor apartment in Little Venice in March 2000. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Similar properties in Little Venice with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £45 invoiced annually. The lease concluded in 2095. Taking into account 70 years remaining we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus expenses.