The value of St Helens leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is below than eighty years
Leasehold premises in St Helens with over 100 years left on the lease are sometimes regarded as a ‘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 buying the freehold unless savings on ground rent and maintenance charges justify 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 are not acceptable. 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your St Helens leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the landlord of her garden flat in St Helens, Elizabeth commenced the lease extension process as the eighty year mark was rapidly approaching. The transaction was finalised in January 2008. The landlord’s costs were kept to an absolute minimum.
Last Christmas we were e-mailed by Mr and Mrs. B David , who purchased a studio apartment in St Helens in May 1997. The dilemma was if we could approximate the price would be to prolong the lease by a further 90 years. Comparable premises in St Helens with a long lease were valued about £264,000. The mid-range ground rent payable was £60 invoiced every twelve months. The lease ran out on 7 November 2079. Having 53 years unexpired we calculated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 exclusive of legals.
In 2012 we were approached by Mr Ibrahim Roux who, having bought a one bedroom apartment in St Helens in May 2010. We are asked if we could approximate the price would be for a 90 year lease extension. Comparable properties in St Helens with an extended lease were worth £225,400. The mid-range amount of ground rent was £45 collected yearly. The lease ran out on 16 March 2090. Considering the 64 years left we calculated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 not including fees.