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Landmark Court of Appeal ruling impacts cost for lease Extensions

A landmark Court of Appeal ruling that could be critical in determining the value of over two million homes in England and Wales with leases of under 80 years following the case of Mundy vs the Sloane Stanley Estate.
The Court of Appeal ruled in favour of the trustees of the Sloane Stanley Estate, which owns numerous freeholds in London’s Chelsea. It upholds a previous verdict by the Upper Tribunal (Lands Chamber) in May 2016. Leaseholders claimed they have been over-paying by up to 50% for lease extensions and freeholds.It is claimed that the Court of Appeal’s verdict meant that leaseholders would now be forced to pay even more for lease extensions and freehold acquisitions. The outcome means that an alternative relativity graph developed by James Wyatt of Parthenia Valuations, which would have lowered the costs for lease extensions where the remaining lease length has dropped below 80 years, cannot be used to calculate the value of a lease extension.
The court’s decision to uphold a lower relativity in leasehold valuations means that  leaseholders could now be forced to pay more for their lease extensions