For anyone whose St James flat is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your St James leasehold, as your property will be more valuable and saleable in respect 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.
Subsequent to lengthy correspondence with the landlord of her purpose-built flat in St James, Jessica initiated the lease extension process as the eighty year threshold was quickly approaching. The transaction completed in October 2006. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were called by Mr Thomas Allen who, having acquired a purpose-built flat in St James in June 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by ninety years. Comparable residencies in St James with an extended lease were valued around £171,800. The mid-range amount of ground rent was £55 collected monthly. The lease end date was on 24 January 2074. Considering the 50 years left we calculated the compensation to the freeholder for the lease extension to be within £32,300 and £37,400 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a St James flat is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case was in relation to 2 flats. The unexpired lease term was 56 years.