The nearer a domestic lease in Victoria nears to zero years unexpired, the more it reduces the value of the property. If the lease has, over 99 years remaining then this decrease may be of little impact that being said there will become a stage when a lease has less than 80 years left as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should extend the lease without delay. Many flat owners in Victoria will qualify for this right; however a conveyancing solicitor should be able to advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Retaining our service gives you better control over the value of your Victoria leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted correspondence with the landlord of her garden apartment in Victoria, Mollie started the lease extension process just as the lease was approaching the crucial 80-year deadline. The lease extension completed in February 2008. The landlord’s fees were restricted to approximately 600 pounds.
In 2012 we were contacted by Mr and Mrs. G Adams who, having acquired a first floor apartment in Victoria in May 2012. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar flats in Victoria with an extended lease were valued around £176,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease finished in 2082. Considering the 56 years unexpired we calculated the premium to the landlord to extend the lease to be between £29,500 and £34,000 not including fees.
An example of a Lease Extension case for a Victoria residence is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case affected 2 flats. The remaining number of years on the lease was 56 years.