It’s a harsh certainty that a Little Venice residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Little Venice property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Little Venice will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Little Venice with more than one hundred years left 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 home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
The conveyancers that we work with procure 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.
Following protracted discussions with the landlord of her studio flat in Little Venice, Rebecca commenced the lease extension process as the 80 year deadline was rapidly advancing. The lease extension was concluded in May 2010. The freeholder’s charges were kept to an absolute minimum.
Last Summer we were called by Mr and Mrs. R Bertrand , who completed a one bedroom apartment in Little Venice in March 2007. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Comparable properties in Little Venice with an extended lease were worth £240,600. The mid-range ground rent payable was £60 billed yearly. The lease finished on 18 May 2087. Having 62 years unexpired we estimated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 not including professional charges.
In 2009 we were e-mailed by Dr Freddie Vincent who, having owned a first floor flat in Little Venice in November 1998. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Identical flats in Little Venice with 100 year plus lease were worth £174,200. The average ground rent payable was £55 billed monthly. The lease finished in 2076. Considering the 51 years left we estimated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including fees.