Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Victoria. Clearly, the term of lease remaining shortens over time. This may slip by relatively unnoticed when the property needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Victoria have the right to extend the lease for a further ninety years in accordance with legislation. Do give careful deliberation before delaying your Victoria lease extension. Holding off that expense now simply increases the price you will ultimately incur for a lease extension
Leasehold properties in Victoria with more than one hundred years remaining on the lease are sometimes referred to as ‘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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your Victoria leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Oliver owned a conversion flat in Victoria on the market with a lease of a few days over 61 years unexpired. Oliver informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. No ground rent would be due on a lease extension were Oliver to exercise his statutory right. Oliver procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Mr M Parker was assigned a lease of a basement apartment in Victoria in April 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Identical flats in Victoria with 100 year plus lease were valued about £255,000. The average ground rent payable was £50 billed per annum. The lease expired on 24 February 2097. Taking into account 71 years outstanding we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.
An example of a Lease Extension decision for a Victoria premises 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 was in relation to 2 flats. The unexpired lease term was 56 years.