With a residential leasehold premises in Little Venice, 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. Many leasehold owners are unconcerned as this seems like a long period of time, you should 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 greater especially when there are fewer than eighty years left. Anyone in Little Venice with a lease approaching 81 years unexpired should seriously think of extending it without delay. When a lease has below eighty years remaining, under the relevant statute the landlord is entitled to calculate and levy a larger premium, assessed on a technical calculation, known as “marriage value” which is payable.
Leasehold premises in Little Venice with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| 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; |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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. |
The conveyancing solicitors that we work with handle 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 Summer Caleb, came seriously close to the eighty-year mark with the lease on his first floor flat in Little Venice. In buying his flat two decades ago, the lease term was of no concern. by good luck, he became aware that he would soon be paying way over the odds for a lease extension. Caleb was able to extend his lease just ahead of time in July. Caleb and the freeholder eventually settled on a premium of £5,500 . If the lease had slipped lower than eighty years, the price would have become more costly by at least £1,025.
In 2011 we were e-mailed by Mrs F Simon who, having bought a one bedroom flat in Little Venice in April 1999. The question was if we could approximate the price would be to prolong the lease by ninety years. Comparable flats in Little Venice with an extended lease were in the region of £205,000. The mid-range ground rent payable was £50 billed annually. The lease end date was in 2104. Having 78 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus expenses.
Last year we were contacted by Dr U Martinez , who completed a one bedroom apartment in Little Venice in October 2002. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparable flats in Little Venice with 100 year plus lease were worth £267,600. The average ground rent payable was £65 billed annually. The lease came to a finish in 2093. Having 67 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £14,300 and £16,400 plus expenses.