St Margarets residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold residencies in St Margarets with over 100 years unexpired on the lease are sometimes 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 to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake St Margarets 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 conveyancing solicitor we work with provide it.
Owen owned a studio flat in St Margarets on the market with a lease of a little over 72 years unexpired. Owen informally approached his freeholder a well known Bristol-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 rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Owen to exercise his statutory right. Owen obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
Last Autumn we were approach by Dr Amelia Cox , who acquired a one bedroom apartment in St Margarets in March 2002. The dilemma was if we could approximate the price would be to prolong the lease by a further 90 years. Similar premises in St Margarets with an extended lease were worth £300,000. The average amount of ground rent was £50 collected yearly. The lease elapsed in 2101. Having 76 years remaining we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.
An example of a Lease Extension case for a St Margarets premises is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case was in relation to 1 flat. The unexpired term as at the valuation date was 60.45 years.