Unfortunately that a Belvedere residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Belvedere property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term drops under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Belvedere will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Belvedere with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Belvedere lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Subsequent to lengthy correspondence with the freeholder of her basement apartment in Belvedere, Erin started the lease extension process just as her lease was approaching the critical 80-year threshold. The legal work was concluded in March 2006. The landlord’s fees were kept to an absolute minimum.
In 2010 we were approached by Mr and Mrs. R Martinez who, having purchased a basement flat in Belvedere in June 2006. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical residencies in Belvedere with a long lease were in the region of £208,600. The average amount of ground rent was £60 collected every twelve months. The lease ended in 2082. Given that there were 57 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including expenses.
An example of a Lease Extension matter before the tribunal for a Belvedere property is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case was in relation to 13 flats. The unexpired term as at the valuation date was 76 years.