The re-sale value of a leasehold property in St James is impacted by how many years the lease has remaining. If it is close to or fewer than 80 years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be finalised well before the eighty year threshold. Leasehold Reform legislation entitles St James qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of ninety years. The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in St James with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you enhanced control over the value of your St James leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy discussions with the freeholder of her basement flat in St James, Emma initiated the lease extension process as the eighty year mark was quickly coming. The legal work was finalised in April 2005. The freeholder’s charges were kept to an absolute minimum.
Mr and Mrs. H Simon acquired a purpose-built flat in St James in August 1995. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by ninety years. Identical homes in St James with 100 year plus lease were valued around £223,400. The mid-range amount of ground rent was £60 invoiced per annum. The lease ended on 13 April 2084. Given that there were 59 years outstanding we calculated the premium to the landlord for the lease extension to be between £27,600 and £31,800 plus professional charges.
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 related to 2 flats. The unexpired residue of the current lease was 56 years.