Soho leases on residential deteriorating in value. Where your lease has approximately ninety years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you begin paying an additional element called marriage value. Flat owners in Soho will mostly be legally entitled to a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In some cases you may not qualify. There are prescribed timetables and formalities to follow once the process has commenced so it’s sensible to be guided by a lawyer during the process.
Leasehold residencies in Soho with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 conveyancers that we work with undertake Soho 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.
14 months ago Blake, came dangerously close to the eighty-year mark with the lease on his garden flat in Soho. In buying his property two decades ago, the unexpired term was of minimal relevance. by good luck, he realised he needed to take action soon on Extending the lease. Blake was able to extend his lease at the eleventh hour in May. Blake and the landlord who owned the flat above in the end agreed on the final figure of £5,500 . If he had missed the deadline, the figure would have increased by at least £950.
Mr and Mrs. S Collins took over the lease of a purpose-built apartment in Soho in June 2003. The dilemma was if we could approximate the price could be for a 90 year lease extension. Similar properties in Soho with a long lease were worth £205,000. The mid-range amount of ground rent was £50 collected annually. The lease came to a finish in 2104. Considering the 79 years outstanding we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
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 affected 1 flat. The number of years remaining on the existing lease(s) was 73.26 years.