With a residential leasehold property in St George, you are in fact renting it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than eighty years left. Leasehold owners in St George with a lease approaching 81 years unexpired should seriously consider extending it as soon as possible. Once a lease has below eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and charge a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in St George with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| 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 George 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.
Jack was the the leasehold proprietor of a high value flat in St George being marketed with a lease of a little over sixty years unexpired. Jack informally spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jack to invoke his statutory right. Jack obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
Last August we were e-mailed by Mr and Mrs. I Roberts , who moved into a recently refurbished apartment in St George in September 2002. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical properties in St George with 100 year plus lease were in the region of £191,400. The average amount of ground rent was £55 invoiced quarterly. The lease concluded in 2079. Considering the 54 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 plus expenses.
Last year we were called by Mr F Davis , who owned a purpose-built apartment in St George in July 2001. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparative residencies in St George with a long lease were worth £295,000. The mid-range amount of ground rent was £45 billed monthly. The lease lapsed on 26 November 2099. Having 74 years left we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.