The re-sale value of a leasehold property in St Neots depends on how many years the lease has remaining. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded ahead of the eighty year mark. Statute entitles St Neots qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises 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. |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers 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.
In the wake of 6 months of protracted discussions with the freeholder of her leasehold flat in St Neots, Lily initiated the lease extension process as the eighty year threshold was fast advancing. The legal work was concluded in May 2009. The landlord’s costs were negotiated to about six hundred GBP.
Mr Seth Rose completed a newly refurbished flat in St Neots in October 1999. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Similar premises in St Neots with an extended lease were in the region of £255,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease terminated in 2096. Considering the 70 years remaining we approximated the premium to the landlord for the lease extension to be between £10,500 and £12,000 plus legals.
In 2012 we were e-mailed by Mr E Davies who, having bought a one bedroom flat in St Neots in July 2006. The question was if we could estimate the price could be for a 90 year extension to my lease. Similar residencies in St Neots with an extended lease were in the region of £246,800. The average ground rent payable was £60 billed every twelve months. The lease expired in 2076. Taking into account 50 years unexpired we calculated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 plus expenses.