Unfortunately that a St Andrews 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 St Andrews property market.Where your lease has approximately 90 years left, 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 slips lower than eighty years - otherwise a higher premium will be due. Most leasehold owners in St Andrews will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in St Andrews with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake St Andrews 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.
Two years ago Lewis, came dangerously near to the 80-year mark with the lease on his purpose- built flat in St Andrews. Having purchased his property two decades ago, the unexpired term was of minimal concern. Fortunately, he became aware that he would imminently be paying an inflated amount for a lease extension. Lewis arranged for a lease extension at the eleventh hour last June. Lewis and the freeholder via the management company in the end settled on the final figure of £5,500 . If the lease had slipped below eighty years, the figure would have become more exhorbitant by at least £1,000.
In 2014 we were called by Mr and Mrs. P André who, having acquired a ground floor flat in St Andrews in January 2006. We are asked if we could estimate the price would be to prolong the lease by a further 90 years. Comparative premises in St Andrews with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease expiry date was in 2100. Given that there were 75 years remaining we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of legals.
Last month we were contacted by Mrs N Moore , who was assigned a lease of a studio apartment in St Andrews in August 1996. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Comparable homes in St Andrews with a long lease were worth £173,800. The mid-range amount of ground rent was £60 billed per annum. The lease terminated on 28 April 2080. Considering the 55 years unexpired we calculated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of professional charges.