It’s an underpublicised truth that a St Neots residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the St Neots property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most flat owners in St Neots will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake St Neots 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.
Half a year ago Callum, came very close to the eighty-year threshold with the lease on his garden flat in St Neots. Having purchased his property two decades ago, the unexpired term was of little interest. As luck would have it, he noticed he needed to take action soon on Extending the lease. Callum was able to extend his lease just ahead of time last April. Callum and the landlord eventually agreed on an amount of £5,500 . If the lease had slipped lower than eighty years, the figure would have escalated by a minimum £950.
Ms Paige García purchased a purpose-built flat in St Neots in May 2007. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar properties in St Neots with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 collected monthly. The lease lapsed on 22 May 2096. Considering the 71 years remaining we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including legals.
Dr R Davies purchased a purpose-built flat in St Neots in May 2012. The dilemma was if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Identical residencies in St Neots with a long lease were worth £254,200. The mid-range amount of ground rent was £60 collected quarterly. The lease terminated on 18 June 2076. Given that there were 51 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 plus fees.