When it comes to domestic leasehold premises in St Nicholas, you are actually purchasing a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are less than eighty years left. Leasehold owners in St Nicholas with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once a lease has under 80 years outstanding, under the current Act the freeholder can calculate and charge a greater amount, assessed on a technical computation, known as “marriage value” which is due.
Leasehold properties in St Nicholas with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle St Nicholas 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 lawyer we work with provide it.
Half a year ago Liam, came precariously close to the eighty-year mark with the lease on his garden flat in St Nicholas. In buying his flat two decades ago, the unexpired term was of no bearing. Luckily, he noticed he would soon be paying way over the odds for a lease extension. Liam arranged for a lease extension just in the nick of time last May. Liam and the landlord who owned the flat above eventually agreed on a premium of £5,000 . If the lease had slid lower than eighty years, the amount would have increased by a minimum £900.
In 2013 we were called by Dr Alice Martin who, having completed a ground floor flat in St Nicholas in January 1998. The dilemma was if we could estimate the price could be to prolong the lease by an additional years. Identical homes in St Nicholas with 100 year plus lease were worth £193,400. The average amount of ground rent was £65 billed per annum. The lease end date was on 13 September 2084. Having 59 years remaining we estimated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 not including legals.
In 2013 we were approached by Mr and Mrs. W Martinez who, having moved into a garden flat in St Nicholas in July 2000. The question was if we could approximate the price would be for a ninety year extension to my lease. Comparable flats in St Nicholas with 100 year plus lease were valued about £255,000. The average amount of ground rent was £50 collected annually. The lease lapsed in 2095. Having 70 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £10,500 and £12,000 exclusive of fees.