Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in St James. Inevitably, the term of lease remaining shortens over time. This is often ignored and only becomes a problem when the property needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in St James have the right to extend the lease for an additional 90 years under Leasehold Reform legislation. You should give careful attention before putting off your St James lease extension. Putting off that expense now likely increases the price you will eventually incur to extend your lease
Leasehold properties in St James with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Lease extensions in St James can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring St James lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Luca was the the leasehold proprietor of a high value apartment in St James being marketed with a lease of a little over sixty years unexpired. Luca on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Luca to exercise his statutory right. Luca obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last year we were e-mailed by Mr Oscar Mitchell , who took over the lease of a studio flat in St James in April 2012. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar properties in St James with an extended lease were worth £265,200. The mid-range amount of ground rent was £65 billed annually. The lease ran out on 25 January 2091. Given that there were 66 years remaining we approximated the compensation to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a St James property is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case related to 2 flats. The unexpired term was 56 years.