Lease Extension Specialists In Prime Central London
WE ARE CHARTERED SURVEYORS SPECIALISING IN THE LEASEHOLD ENFRANCHISEMENT FIELD - the valuation and negotiation of additional 90 year lease extensions and freehold purchases. We will advise you through every step of a complex process and, by providing a report and acting in the lease extension negotiations, can save you considerable sums of money.
We act predominantly in prime central London on major private estates such as the Hyde Park, Portman, Grosvenor, Cadogan and Wellcome Trust Estates. This experience is invaluable when it comes to the crunch in negotiations with all landlords large or small.
Spring 2013 News Update
The latest authoritative research shows that the indices for residential property in prime London rose by 2.2% over the last quarter.
Prime central London is likely to continue to be regarded as a safe haven for overseas investors whilst the turmoil and uncertainty in the Eurozone and elsewhere continues.
The effect of this growth in property values on the cost of lease extensions in prime areas such as Mayfair, Kensington and Chelsea is significant. Taking the case of a 20 year lease falling to a 19 year lease as an example, a premium costing £2.3m in April 2012 would be likely to cost £2.63m in March 2013 - an increase of about 15% just because of the delay in serving notice for 1 year. To keep it simple, all things being equal,the shorter the lease the more expensive the premium. And if market values are rising as they are at the moment, the cost of the delay of serving notice is even more expensive.
There has been an interesting decision in the never ending battle over deferment rates. In the case of City & Country Properties Ltd v Alexander Christopher Charles Yeats the Upper Tribunal gave another chink of light for lessees hoping for a rise in the deferment rate in central London. In their decision in July 2012, the Upper Tribunal stated that "... there should be an addition of a further 0.25% to the deferment rate to reflect the potential actual burden of management...". As Yeats concerned a property outside London, the major estates have been reluctant to accept a deferment rate of 5.25% as applicable in prime London. However there is an Upper Tribunal case concerning a property in Grosvenor Square W1 which is due to be heard this summer on this very issue. We will keep you informed of developments...
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There have been some advantageous decisions recently for certain tenants in prime central London. There were three Upper Tribunal decisions in 2010 which may have positive ramifications firstly for some lessees on the Grosvenor Estate, secondly for lessees with leases under 20 years and thirdly for lessees of flats where the freeholder has some responsibility for management.
Lessees in all of these three categories may, under certain conditions, enjoy the benefit of cheaper lease extensions than would be the case prior to these decisions.
Charles Tellerman will be pleased to explain these decisions and how they may effect your lease extension premium so please call him on 0207 792 9950.
Lease Extension Procedure
THE LESSEE IS ENTITLED TO a statutory lease extension of an
additional 90 years at a peppercorn ground rent as provided by the Leasehold Reform Housing and Urban Development
Act 1993 (as amended) provided that ownership runs for at least 2 years since registration and the lease was
originally granted for a term of at least 21 years.
The premium is based on compensation (to compensate the landlord for what they have lost by granting the extra 90 years) plus fifty percent of the marriage value (the additional value resulting from the marrying of the freehold and leasehold interests).
The statutory process is kickstarted by the serving of a section 42 notice which serves
at least three important functions:
1) It fixes the date of valuation
2) It freezes the length of the lease for the purpose of assessing the premium.
3) It forces the landlord to comply with the statutory timetable. The landlord has to respond with a counter offer contained in a section 45 notice within about two months.
The negotiation process to extend a lease would then be started and we would do our best to achieve a settlement within the legislative time frame.
Please see the Locations page to get an idea of the major private estates in prime central London where we have achieved our latest successful lease extension and freehold enfranchisement settlements.