When it comes to domestic leasehold property in Victoria, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are less than eighty years remaining. Anyone in Victoria with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has under 80 years remaining, under the current legislation the landlord is entitled to calculate and demand a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Regardless of whether you are a tenant or a landlord in Victoria,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Victoria valuers.
Tommy owned a high value apartment in Victoria being sold with a lease of a little over 59 years outstanding. Tommy on an informal basis approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Tommy to exercise his statutory right. Tommy procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Last September we were approach by Mr and Mrs. J Martínez , who owned a one bedroom flat in Victoria in November 2007. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparative premises in Victoria with 100 year plus lease were worth £275,000. The mid-range amount of ground rent was £55 billed monthly. The lease concluded in 2101. Taking into account 76 years unexpired we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus fees.
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 affected 2 flats. The unexpired lease term was 56 years.