When it comes to domestic leasehold property in St Mary Cray, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially when there are less than 80 years remaining. Residents in St Mary Cray with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once a lease has below 80 years left, under the relevant statute the freeholder can calculate and levy a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Regardless of whether you are a tenant or a freeholder in St Mary Cray,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with St Mary Cray valuers.
Max was the the leasehold proprietor of a 2 bedroom flat in St Mary Cray being sold with a lease of just over 72 years unexpired. Max on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Max to exercise his statutory right. Max obtained expert advice and secured satisfactory deal without resorting to tribunal and sell the flat.
Last month we were e-mailed by Ms Millie Roberts , who took over the lease of a newly refurbished apartment in St Mary Cray in July 1995. The question was if we could estimate the premium could be to extend the lease by 90 years. Comparative homes in St Mary Cray with an extended lease were worth £254,200. The average ground rent payable was £60 collected yearly. The lease came to a finish in 2077. Considering the 51 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 not including legals.
An example of a Lease Extension case for a St Mary Cray property is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The unexpired lease term was 50.57 years.