Chances are that where you own a flat in Blackfriars you actually own a long leasehold interest over your property
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| Yorkshire 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. |
The lawyers that we work with handle Blackfriars 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 lawyer we work with provide it.
Harrison owned a 2 bedroom apartment in Blackfriars on the market with a lease of a few days over sixty years outstanding. Harrison on an informal basis spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harrison to exercise his statutory right. Harrison obtained expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2014 we were e-mailed by Mr R James who, having purchased a studio flat in Blackfriars in November 1999. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Similar residencies in Blackfriars with an extended lease were worth £245,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease terminated in 2093. Taking into account 68 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Blackfriars flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case was in relation to 1 flat. The unexpired residue of the current lease was 66.8 years.