St Davids leases on domestic properties are gradually losing value. Where your lease has approximately ninety years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for the lease extension to be in place before the term of the current lease falls under 80 years - otherwise a higher amount will be due. Flat owners in St Davids will usually qualify for a lease extension; however a solicitor should be able check your eligibility. In some situations you may not be entitled. There are prescribed deadlines and formalities to follow once the process is triggered so it’s wise to be guided by a conveyancer during the process.
It is generally accepted that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 Davids 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.
Luke owned a studio apartment in St Davids being sold with a lease of a little over fifty eight years outstanding. Luke informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luke to exercise his statutory right. Luke procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
In 2010 we were e-mailed by Ms Maisie Phillips who, having moved into a first floor flat in St Davids in August 1996. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable homes in St Davids with a long lease were valued around £295,000. The average amount of ground rent was £50 collected annually. The lease ended on 15 October 2100. Considering the 75 years unexpired we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 not including expenses.
Mr Ethan Johnson completed a basement apartment in St Davids in February 2009. The dilemma was if we could estimate the price would likely be to extend the lease by a further 90 years. Comparative residencies in St Davids with 100 year plus lease were in the region of £250,400. The mid-range ground rent payable was £65 collected every twelve months. The lease lapsed on 19 May 2089. Taking into account 64 years left we calculated the premium to the freeholder to extend the lease to be within £19,000 and £22,000 exclusive of legals.