When it comes to long leasehold premises in St Pancras, you are actually purchasing a right to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years left. Anyone in St Pancras with a lease drawing near to 81 years unexpired should seriously consider extending it without delay. Once a lease has below 80 years left, under the current legislation the landlord is entitled to calculate and charge a larger premium, assessed on a technical computation, known as “marriage value” which is due.
Leasehold premises in St Pancras with over one hundred 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 circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake St Pancras 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.
Following unsuccessful correspondence with the landlord of her basement apartment in St Pancras, Anna started the lease extension process just as her lease was nearing the all-important eighty-year mark. The lease extension was concluded in April 2014. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were approached by Dr V Hall who, having completed a one bedroom flat in St Pancras in September 2008. The question was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Identical homes in St Pancras with a long lease were valued around £171,800. The mid-range ground rent payable was £55 invoiced quarterly. The lease ran out in 2076. Considering the 50 years left we calculated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 plus professional charges.
An example of a Lease Extension case for a St Pancras residence is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case related to 1 flat. The unexpired lease term was 66.8 years.