When it comes to long leasehold property in St George, you are actually buying an entitlement to live in a property for a prescribed time frame. 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 number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years remaining. Leasehold owners in St George with a lease nearing 81 years unexpired should seriously consider extending it without delay. Once the lease term has under 80 years outstanding, under the relevant statute the freeholder can calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same 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 many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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 undertake 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 conveyancer we work with provide it.
Jamie owned a 2 bedroom flat in St George being sold with a lease of a few days over 59 years outstanding. Jamie on an informal basis spoke with his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jamie to invoke his statutory right. Jamie obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last year we were phoned by Mr and Mrs. C Allen , who was assigned a lease of a one bedroom flat in St George in September 2004. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical properties in St George with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £45 billed annually. The lease came to a finish in 2098. Taking into account 73 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus expenses.
In 2014 we were approached by Mr and Mrs. S Davies who, having owned a purpose-built apartment in St George in February 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Comparative homes in St George with a long lease were valued around £240,600. The mid-range ground rent payable was £60 billed quarterly. The lease lapsed in 2087. Having 62 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 plus costs.