It’s an underpublicised truth that a St John's Wood residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the St John's Wood property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops under eighty years, you will then be required to pay half of the property's 'marriage value' on top of 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 flat owners in St John's Wood will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in St John's Wood 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
Lease extensions in St John's Wood can be a difficult process. We recommend you get professional help from a lawyer and valuer well versed in the legislation and lease extension process.
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 dealing with St John's Wood lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Rory owned a high value flat in St John's Wood on the market with a lease of just over fifty eight years unexpired. Rory informally spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Rory to exercise his statutory right. Rory obtained expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
In 2010 we were approached by Ms T Bell who, having completed a one bedroom flat in St John's Wood in August 2009. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Similar properties in St John's Wood with an extended lease were in the region of £255,000. The mid-range amount of ground rent was £50 invoiced annually. The lease termination date was on 26 August 2096. Considering the 71 years outstanding we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
An example of a Lease Extension case for a St John's Wood residence is Garden Flat 195 Goldhurst Terrace in May 2012. The Tribunal held in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease should be £60,855.00. This case related to 1 flat. The unexpired lease term was 60.16 years.