As the the remaining lease term of a St Mellons residential lease lessens so does its value and therefore the value of your property. If the residual term has, more than 100 years remaining then this decrease may be negligible however there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending sooner rather than later. Many flat owners in St Mellons will meet the qualifying criteria; nevertheless a conveyancing solicitor should be able to advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold premises in St Mellons with in excess of 100 years remaining 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in St Mellons,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with St Mellons valuers.
Lewis owned a 2 bedroom apartment in St Mellons being marketed with a lease of just over 72 years remaining. Lewis informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Lewis to exercise his statutory right. Lewis obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last Spring we were approach by Mrs Nicole Jackson , who bought a first floor flat in St Mellons in February 2005. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparative properties in St Mellons with an extended lease were worth £193,400. The average ground rent payable was £65 invoiced every twelve months. The lease expired on 24 March 2085. Having 59 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 not including expenses.
In 2013 we were contacted by Mrs R Garcia who, having bought a newly refurbished flat in St Mellons in April 2008. The question was if we could approximate the premium could be to extend the lease by a further 90 years. Comparative properties in St Mellons with an extended lease were in the region of £250,000. The average amount of ground rent was £50 collected per annum. The lease elapsed in 2096. Given that there were 70 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.