Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in St Ives. Inevitably, the period of lease remaining reduces over time. This is often ignored and only raises itself as an issue when the flat or house needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in St Ives have the legal entitlement to extend the lease for an additional ninety years under statute. You should give due attention before delaying your St Ives lease extension. Putting off the cost now simply increases the price you will eventually incur to extend your lease
It is generally considered that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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. |
Using our service gives you enhanced control over the value of your St Ives leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Dylan, came perilously near to the eighty-year threshold with the lease on his leasehold flat in St Ives. In buying his home twenty years previously, the length of the lease was of little relevance. Thankfully, he recognised he needed to take action soon on a lease extension. Dylan extended the lease at the eleventh hour in August. Dylan and the landlord subsequently settled on a premium of £5,500 . If the lease had slipped below 80 years, the figure would have escalated by a minimum £1,050.
Mr Jayden Young acquired a one bedroom apartment in St Ives in September 2000. The question was if we could estimate the price would be to prolong the lease by a further 90 years. Comparable homes in St Ives with a long lease were valued about £200,800. The mid-range amount of ground rent was £65 collected quarterly. The lease finished on 24 July 2086. Taking into account 60 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 not including fees.
Last Autumn we were contacted by Dr U Bonnet , who completed a purpose-built flat in St Ives in September 2001. The dilemma was if we could estimate the price could be for a 90 year lease extension. Comparable homes in St Ives with a long lease were in the region of £255,000. The average ground rent payable was £50 billed every twelve months. The lease ended in 2097. Considering the 71 years unexpired we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.