Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in St Ives. Clearly, the period of lease remaining shortens over time. This is often overlooked and only becomes a problem when the residence has to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Qualifying long lease owners in St Ives have the right to extend the lease for a further 90 years under statute. You should give careful consideration before putting off your St Ives lease extension. Holding off that expense now only increases the price you will ultimately have to pay for a lease extension
Leasehold residencies in St Ives with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify 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. |
| 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. |
| 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 procure St Ives 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 conveyancing solicitor we work with provide it.
In 2014 Finley, started to get near to the 80-year threshold with the lease on his purpose- built flat in St Ives. In buying his flat two decades ago, the lease term was of little bearing. Luckily, he recognised he needed to take action soon on Extending the lease. Finley was able to extend his lease at the eleventh hour last June. Finley and the landlord who owned the flat above subsequently settled on a premium of £5,500 . If the lease had fallen lower than eighty years, the sum would have gone up by at least £850.
In 2014 we were phoned by Ms Zoe Morris who, having owned a basement apartment in St Ives in October 2001. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparative premises in St Ives with an extended lease were worth £183,600. The mid-range amount of ground rent was £65 billed yearly. The lease terminated in 2083. Taking into account 57 years unexpired we approximated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including expenses.
In 2009 we were e-mailed by Dr Dylan Phillips who, having bought a first floor apartment in St Ives in September 2002. The question was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical properties in St Ives with a long lease were valued about £245,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease expired in 2094. Given that there were 68 years unexpired we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.