When it comes to domestic leasehold property in Blackfriars, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than 80 years remaining. Anyone in Blackfriars with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. When the lease term has below eighty years left, under the relevant statute the freeholder can calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service gives you better control over the value of your Blackfriars 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 are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Joshua was the the leasehold owner of a 2 bedroom apartment in Blackfriars being sold with a lease of just over 59 years outstanding. Joshua informally approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Joshua to invoke his statutory right. Joshua procured expert advice and secured satisfactory deal informally and sell the flat.
In 2012 we were contacted by Mr and Mrs. W Young who, having bought a one bedroom flat in Blackfriars in June 2009. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar premises in Blackfriars with an extended lease were valued around £265,000. The average amount of ground rent was £55 invoiced monthly. The lease finished on 3 July 2099. Taking into account 74 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.
An example of a Lease Extension case for a Blackfriars flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case affected 1 flat. The unexpired residue of the current lease was 66.8 years.