Little Venice leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Little Venice tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Little Venice you would be well advised to see if your lease has between 70 and ninety years remaining. There are compelling reasons why a Little Venice leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is effected without delay
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Little Venice 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.
Harry owned a conversion apartment in Little Venice being sold with a lease of fraction over sixty years left. Harry informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Harry to exercise his statutory right. Harry procured expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
Last Summer we were approach by Mrs Victoria Williams , who moved into a recently refurbished apartment in Little Venice in September 1999. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparative premises in Little Venice with 100 year plus lease were in the region of £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease termination date was in 2078. Considering the 53 years remaining we approximated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of legals.
Mr Jamie Gray moved into a first floor apartment in Little Venice in September 1999. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparative properties in Little Venice with 100 year plus lease were valued around £290,000. The average ground rent payable was £45 billed quarterly. The lease expiry date was on 4 March 2098. Taking into account 73 years unexpired we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.