Covent Garden leases on residential deteriorating in value. if your lease has about ninety years remaining, you should start thinking about a lease extension. If lease term is less than eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Covent Garden will usually qualify for a lease extension; however a solicitor should be able check your eligibility. In some circumstances you may not be entitled. There are prescribed deadlines and procedures to follow once the process is initiated so it’s prudent to be guided by a lawyer during the process.
It is generally considered that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Covent Garden can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and valuer with experience in lease extensions.
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 Covent Garden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Thomas, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Covent Garden. In buying his property two decades ago, the lease term was of minimal interest. Luckily, he became aware that he would soon be paying an inflated amount for a lease extension. Thomas was able to extend his lease just in the nick of time in June. Thomas and the freeholder via the managing agents ultimately settled on an amount of £5,000 . If the lease had dropped lower than eighty years, the premium would have increased by a minimum £975.
In 2011 we were e-mailed by Mr and Mrs. R Anderson who, having moved into a basement flat in Covent Garden in July 2004. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar properties in Covent Garden with an extended lease were worth £232,800. The average amount of ground rent was £45 collected every twelve months. The lease expired on 24 May 2090. Given that there were 65 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Covent Garden property is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The unexpired lease term was 73.26 years.