St Pancras leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in St Pancras enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in St Pancras you would be well advised to investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in St Pancras with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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 | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in St Pancras can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring St Pancras lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Off the back of protracted negotiations with the freeholder of her leasehold apartment in St Pancras, Phoebe commenced the lease extension process just as her lease was coming close to the crucial 80-year threshold. The transaction was concluded in June 2015. The landlord’s charges were restricted to below 600 pounds.
Mr and Mrs. E King purchased a ground floor flat in St Pancras in January 2003. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparable properties in St Pancras with 100 year plus lease were worth £198,800. The average ground rent payable was £55 collected quarterly. The lease came to a finish on 12 January 2080. Considering the 55 years outstanding we calculated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 plus legals.
An example of a Lease Extension matter before the tribunal for a St Pancras property 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 term was 66.8 years.