Unfortunately that a Capel St Mary residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Capel St Mary property prices.Where your lease has approximately 90 years left, you should start considering 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 dips under 80 years - otherwise a higher premium will be due. The majority of flat owners in Capel St Mary will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold residencies in Capel St Mary with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Capel St Mary 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 lawyer we work with provide it.
John owned a 2 bedroom flat in Capel St Mary being marketed with a lease of a few days over 59 years unexpired. John on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were John to invoke his statutory right. John procured expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
Last Winter we were called by Mr and Mrs. P Nelson , who owned a first floor apartment in Capel St Mary in August 1995. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Similar flats in Capel St Mary with a long lease were in the region of £275,000. The average ground rent payable was £45 collected annually. The lease expired on 10 January 2095. Having 69 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus expenses.
Mr Noah Morgan took over the lease of a first floor flat in Capel St Mary in April 1997. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Comparable properties in Capel St Mary with a long lease were worth £216,000. The mid-range ground rent payable was £60 invoiced monthly. The lease lapsed in 2084. Given that there were 58 years unexpired we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of expenses.