St James leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most St James tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in St James you really ought to see if your lease has between seventy and 90 years left. There are compelling reasons why a St James flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea Building Society | |
| Halifax | |
| National Westminster Bank | |
| The Mortgage Works | |
| Yorkshire Building Society |
The conveyancers that we work with undertake St James 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 lawyer we work with provide it.
Last Winter Austin, started to get close to the 80-year threshold with the lease on his ground floor apartment in St James. In buying his flat two decades ago, the length of the lease was of minimal concern. Fortunately, he realised he would soon be paying an inflated amount for Extending the lease. Austin was able to extend his lease just under the wire last April. Austin and the freeholder subsequently agreed on the final figure of £5,000 . If he failed to meet the deadline, the figure would have become more costly by at least £1,000.
In 2014 we were approached by Mr and Mrs. O Moreau who, having took over the lease of a studio flat in St James in October 2002. The question was if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Similar homes in St James with a long lease were valued about £200,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease concluded in 2103. Taking into account 77 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including costs.
An example of a Lease Extension decision for a St James premises 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 was in relation to 2 flats. The unexpired residue of the current lease was 56 years.