When it comes to long leasehold premises in Battersea, you are in fact renting it for a certain period of time. In recent years 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 consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably when there are less than 80 years remaining. Residents in Battersea with a lease approaching 81 years left should seriously consider extending it without delay. When the lease term has fewer than 80 years left, under the relevant statute the freeholder can calculate and charge a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 will provide you enhanced control over the value of your Battersea leasehold, as your property will be more valuable and saleable in terms of lease length should you wish 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.
Following unsuccessful discussions with the freeholder of her basement flat in Battersea, Holly commenced the lease extension process as the 80 year deadline was fast advancing. The transaction was concluded in February 2014. The landlord’s charges were restricted to less than 450 pounds.
In 2011 we were called by Mr and Mrs. T Reed who, having completed a studio flat in Battersea in October 2010. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Similar flats in Battersea with 100 year plus lease were worth £249,200. The mid-range amount of ground rent was £60 collected per annum. The lease terminated in 2075. Given that there were 51 years outstanding we approximated the premium to the freeholder for the lease extension to be within £42,800 and £49,400 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a Battersea flat is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case related to 1 flat. The number of years remaining on the existing lease(s) was 57.06 years.