With a domestic leasehold premises in St Brides Major, you are actually buying an entitlement to reside in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than 80 years remaining. Leasehold owners in St Brides Major with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once a lease has under eighty years remaining, under the relevant statute the freeholder is entitled to calculate and demand a greater amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
The conveyancers that we work with handle St Brides Major 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 conveyancing solicitor we work with provide it.
Andrew owned a studio flat in St Brides Major being sold with a lease of just over 72 years outstanding. Andrew on an informal basis approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Last Winter we were contacted by Ms D Young , who owned a studio flat in St Brides Major in September 2009. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative homes in St Brides Major with a long lease were worth £295,000. The mid-range amount of ground rent was £45 invoiced annually. The lease concluded in 2099. Given that there were 74 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.
Last year we were e-mailed by Mr and Mrs. U Díaz , who acquired a studio flat in St Brides Major in March 2010. The question was if we could estimate the price would likely be for a 90 year lease extension. Comparative homes in St Brides Major with an extended lease were valued around £243,000. The mid-range ground rent payable was £65 collected yearly. The lease terminated in 2088. Given that there were 63 years remaining we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus costs.