St John's Wood leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in St John's Wood enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in St John's Wood you would be well advised to check if your lease has between 70 and ninety years left. There are good reasons why a St John's Wood flat owner with a lease having around 80 years remaining should take steps to make sure that a lease extension is effected without delay
Leasehold premises in St John's Wood with in excess of 100 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 property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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. |
The conveyancers that we work with undertake St John's Wood 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 conveyancer we work with provide it.
Off the back of protracted negotiations with the freeholder of her purpose-built flat in St John's Wood, Lucy commenced the lease extension process just as her lease was nearing the all-important eighty-year threshold. The transaction was finalised in January 2011. The landlord’s charges were kept to an absolute minimum.
In 2012 we were e-mailed by Mrs Jade Simon who, having moved into a basement flat in St John's Wood in October 2011. We are asked if we could approximate the premium would be to extend the lease by 90 years. Comparable flats in St John's Wood with an extended lease were worth £256,600. The mid-range amount of ground rent was £60 collected quarterly. The lease terminated in 2077. Having 52 years remaining we approximated the compensation to the landlord to extend the lease to be within £41,800 and £48,400 exclusive of professional charges.
An example of a Lease Extension case for a St John's Wood premises is Garden Flat 195 Goldhurst Terrace in May 2012. The Tribunal held in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease should be £60,855.00. This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 60.16 years.