Main reasons to start your Victoria lease extension

Top reasons for lease extension now:

A Victoria leasehold property depreciates with the years remaining on the lease.

Unfortunately that a Victoria residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Victoria property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to 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 Most flat owners in Victoria will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.

An extended lease has roughly the same value as a freehold

Leasehold residencies in Victoria with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.

Lending institutions may not lend with a short lease

The propensity since over the last decade has been for banks to tighten lending criteria across the board - this has extended to the types of security over which the home loan is to be granted. This has meant the unexpired lease term required by mortgage companies has increased. Historically banks would lend on a lease with 25 years plus the term of the loan - typically 50 year leases but those requirements evolved by the requirement for lengthy leases - many now have a minimum term of 75 years as a prerequisite.

Get in touch with one of our Victoria lease extension solicitors or enfranchisement solicitors

The conveyancing solicitors that we work with procure Victoria 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 conveyancing solicitor we work with provide it.

Victoria Lease Extension Example Cases:

Mollie, Victoria, London,

After unsuccessful correspondence with the freeholder of her purpose-built apartment in Victoria, Mollie commenced the lease extension process as the eighty year threshold was fast advancing. The legal work was finalised in May 2008. The landlord’s charges were kept to an absolute minimum.

Victoria case:

In 2013 we were phoned by Dr Jacob Moreau who, having purchased a studio flat in Victoria in January 1997. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Identical flats in Victoria with a long lease were worth £246,800. The mid-range ground rent payable was £60 collected annually. The lease ended in 2076. Given that there were 50 years left we approximated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 not including fees.