Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Soho. Inevitably, the length of lease left reduces as time goes by. This may slip by relatively unnoticed when the residence has to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension. Eligible long lease owners in Soho have the right to extend the lease for a further 90 years under statute. Do give due consideration before putting off your Soho lease extension. Putting off the cost now likely increases the price you will eventually incur for a lease extension
Leasehold properties in Soho with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Lease extensions in Soho can be a difficult process. We recommend you procure professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Soho lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Blake, came seriously close to the eighty-year threshold with the lease on his two bedroom flat in Soho. Having purchased his flat 18 years ago, the lease term was of little importance. Thankfully, he realised he needed to take action soon on a lease extension. Blake was able to extend his lease at the eleventh hour in September. Blake and the freeholder via the managing agents in the end agreed on sum of £5,500 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,075.
In 2011 we were contacted by Mr and Mrs. Y Allen who, having bought a one bedroom apartment in Soho in November 2005. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Similar flats in Soho with 100 year plus lease were valued about £233,200. The mid-range ground rent payable was £60 invoiced every twelve months. The lease termination date was on 15 October 2087. Considering the 61 years as a residual term we approximated the premium to the landlord for the lease extension to be within £22,800 and £26,400 not including costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Soho flat is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case was in relation to 1 flat. The unexpired lease term was 73.26 years.