Knightsbridge leases on residential deteriorating in value. if your lease has about 90 years remaining, you should start considering the need for a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you start incurring an additional element called marriage value. Flat owners in Knightsbridge will usually qualify for a lease extension; however a solicitor will confirm your eligibility. In some situations you may not be entitled. There are prescribed deadlines and procedures to follow once the process has commenced so it’s best to be guided by a lawyer during the process.
Leasehold residencies in Knightsbridge with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. 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 |
|---|---|
| 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. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Knightsbridge 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 conveyancer we work with provide it.
Teddy owned a conversion apartment in Knightsbridge being sold with a lease of just over sixty years left. Teddy on an informal basis contacted his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were Teddy to invoke his statutory right. Teddy obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
In 2010 we were contacted by Mr and Mrs. H Cooper who, having moved into a newly refurbished apartment in Knightsbridge in October 1997. The question was if we could estimate the price would likely be for a ninety year extension to my lease. Identical flats in Knightsbridge with a long lease were valued around £275,000. The average ground rent payable was £55 billed yearly. The lease finished in 2101. Considering the 76 years remaining we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.
An example of a Lease Extension matter before the tribunal for a Knightsbridge residence is Flat 3 47 Cadogan Square in December 2010. the Tribunal determined that the premium payable to the landord by the leaseholder for the lease extension was £732,935 This case affected 1 flat. The unexpired term as at the valuation date was 13.33 years.