It’s a harsh certainty that a St Anns residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the St Anns property market.Once your lease gets to 85ish years, you should 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 lower than 80 years - otherwise a higher amount will be due. The majority of leasehold owners in St Anns 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 be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in St Anns with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a landlord in St Anns,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with St Anns valuers.
Tyler owned a studio flat in St Anns being sold with a lease of just over 59 years left. Tyler on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Tyler to exercise his statutory right. Tyler obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Mr and Mrs. O Martínez was assigned a lease of a purpose-built flat in St Anns in May 2000. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative premises in St Anns with an extended lease were worth £290,000. The average amount of ground rent was £60 billed quarterly. The lease expired on 17 June 2106. Considering the 80 years outstanding we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus professional charges.
In 2012 we were called by Dr U Richardson who, having purchased a purpose-built flat in St Anns in February 1995. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Identical premises in St Anns with 100 year plus lease were in the region of £200,800. The mid-range amount of ground rent was £65 billed yearly. The lease terminated on 2 November 2086. Having 60 years as a residual term we approximated the premium to the landlord to extend the lease to be within £20,900 and £24,200 plus legals.