The market value of a leasehold property in St Pancras depends on how many years the lease has left to run. If it is close to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that all matters can be finalised in advance of the eighty year threshold. Statute entitles St Pancras qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in St Pancras with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Godiva Mortgages | 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. |
Lease extensions in St Pancras can be a difficult process. We recommend you get guidance from a lawyer and valuer with experience in this area.
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 a wealth of experience dealing with 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.
Kai was the the leasehold owner of a 2 bedroom apartment in St Pancras on the market with a lease of just over fifty eight years outstanding. Kai on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Kai to exercise his statutory right. Kai procured expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2010 we were contacted by Dr Naomi Morris who, having bought a ground floor apartment in St Pancras in March 2009. We are asked if we could estimate the premium would be for a ninety year lease extension. Identical flats in St Pancras with an extended lease were valued around £200,000. The average ground rent payable was £50 collected yearly. The lease expiry date was on 19 June 2103. Given that there were 78 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus legals.
An example of a Lease Extension matter before the tribunal for a St Pancras flat 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 was in relation to 1 flat. The unexpired lease term was 66.8 years.