Victoria leases on residential deteriorating in value. Where your lease has about ninety years remaining, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Victoria will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to check your eligibility. In certain circumstances you may not be entitled. There are prescribed timetables and formalities to follow once the process has commenced so it’s wise to be guided by a conveyancer during the process.
Leasehold premises in Victoria with over one hundred years unexpired 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 property. In such circumstances there is often little to be gained by purchasing the freehold 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Victoria can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Victoria lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Twenty four months ago Gabriel, came seriously near to the 80-year threshold with the lease on his one bedroom flat in Victoria. Having purchased his property 19 years previously, the unexpired term was of no relevance. Luckily, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Gabriel was able to extend his lease just under the wire last June. Gabriel and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If the lease had fallen lower than 80 years, the amount would have gone up by at least £1,100.
Last month we were called by Ms Alisha Hernández , who completed a ground floor flat in Victoria in May 1995. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Identical residencies in Victoria with a long lease were worth £200,800. The mid-range ground rent payable was £65 billed annually. The lease finished on 25 February 2085. Having 60 years unexpired we calculated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 plus legals.
An example of a Lease Extension matter before the tribunal 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 related to 2 flats. The remaining number of years on the lease was 56 years.