Victoria leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for a lease extension to take place before the term of the current lease drops below eighty years - otherwise a higher premium will be due. Flat owners in Victoria will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In certain circumstances you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced so it’s best to be guided by a conveyancing solicitor during the process.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Retaining our service gives you enhanced control over the value of your Victoria leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Lucas, came critically near to the 80-year mark with the lease on his purpose- built flat in Victoria. In buying his flat twenty years previously, the length of the lease was of minimal relevance. by good luck, it dawned on him that he needed to take action soon on a lease extension. Lucas arranged for a lease extension just in the nick of time last May. Lucas and the landlord who owned the flat above ultimately settled on a premium of £5,500 . If he had missed the deadline, the sum would have increased by at least £875.
Last Autumn we were phoned by Mr and Mrs. I Taylor , who took over the lease of a purpose-built flat in Victoria in February 1995. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Identical premises in Victoria with an extended lease were valued about £218,000. The mid-range ground rent payable was £45 billed annually. The lease finished on 17 January 2089. Having 63 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £17,100 and £19,800 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Victoria property 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.