Soho leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Soho residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Soho you really ought to investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Soho flat owner with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
It is conventional wisdom that a property with more than 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 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Soho can be a difficult process. We recommend you secure professional help from a lawyer and surveyor with experience in this area.
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 procuring 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 Felix, came critically near to the 80-year mark with the lease on his basement flat in Soho. In buying his property two decades ago, the unexpired term was of no interest. by good luck, he noticed he would imminently be paying way over the odds for a lease extension. Felix arranged for a lease extension just in the nick of time last January. Felix and the freeholder subsequently settled on the final figure of £5,000 . If he not met the deadline, the amount would have increased by at least £1,150.
Mrs S Pérez was assigned a lease of a ground floor flat in Soho in September 2009. The question was if we could estimate the price could be to prolong the lease by 90 years. Comparable homes in Soho with 100 year plus lease were in the region of £300,000. The mid-range amount of ground rent was £50 billed annually. The lease lapsed on 1 February 2101. Considering the 76 years unexpired we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Soho residence 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 unexpired term was 73.26 years.