When it comes to residential leasehold property in St James, you are in fact renting it for a certain period 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 extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than eighty years left. Residents in St James with a lease approaching 81 years remaining should seriously think of extending it sooner than later. Once the lease term has below 80 years outstanding, under the relevant Act the landlord can calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold premises in St James with over 100 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in St James,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with St James valuers.
Last year Harvey, came precariously close to the 80-year threshold with the lease on his first floor apartment in St James. Having bought his flat 18 years ago, the length of the lease was of little significance. Thankfully, he noticed he needed to take steps soon on Extending the lease. Harvey arranged for a lease extension just under the wire in April. Harvey and the landlord who owned the flat above eventually settled on a premium of £5,500 . If he failed to meet the deadline, the price would have increased by a minimum £1,150.
In 2014 we were phoned by Mr and Mrs. T Thomas who, having purchased a first floor apartment in St James in September 2002. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Comparable properties in St James with 100 year plus lease were valued about £206,200. The average amount of ground rent was £60 billed monthly. The lease elapsed in 2082. Having 56 years remaining we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including professional charges.
An example of a Lease Extension case 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 affected 2 flats. The unexpired lease term was 56 years.