It’s a harsh certainty that a St Helens residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the St Helens property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in St Helens will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in St Helens with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in St Helens,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with St Helens valuers.
In 2014 Oscar, started to get near to the 80-year mark with the lease on his two bedroom flat in St Helens. Having purchased his property two decades ago, the unexpired term was of little concern. Fortunately, he realised he needed to take action soon on Extending the lease. Oscar extended the lease just under the wire last July. Oscar and the landlord in the end agreed on sum of £5,000 . If the lease had fallen lower than eighty years, the price would have escalated by a minimum £875.
Last Summer we were phoned by Mr and Mrs. P Khan , who was assigned a lease of a basement flat in St Helens in February 2008. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Identical premises in St Helens with 100 year plus lease were valued about £255,000. The average ground rent payable was £50 billed yearly. The lease terminated in 2095. Given that there were 70 years remaining we calculated the premium to the landlord to extend the lease to be within £10,500 and £12,000 exclusive of fees.
In 2014 we were called by Mr and Mrs. M Bailey who, having was assigned a lease of a one bedroom flat in St Helens in September 2002. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical properties in St Helens with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 billed annually. The lease finished in 2075. Taking into account 50 years remaining we approximated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 exclusive of legals.