Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Soho. Inevitably, the period of lease left reduces as time goes by. This may slip by relatively unnoticed when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Soho have the right to extend the lease for a further 90 years in accordance with statute. Please give careful attention before delaying your Soho lease extension. Putting off that expense now only increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Soho,the lease extension lawyers 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 Soho valuers.
Last October Jason, started to get close to the eighty-year threshold with the lease on his leasehold apartment in Soho. Having bought his property two decades ago, the length of the lease was of minimal concern. by good luck, it dawned on him that he needed to take steps soon on Extending the lease. Jason was able to extend his lease just in the nick of time last January. Jason and the freeholder via the managing agents ultimately agreed on a premium of £5,000 . If the lease had slid to less than 80 years, the premium would have gone up by a minimum £1,050.
In 2013 we were called by Mr Caleb Nelson who, having moved into a garden apartment in Soho in June 2010. The question was if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Similar properties in Soho with an extended lease were worth £275,000. The average ground rent payable was £45 collected monthly. The lease elapsed in 2093. Having 69 years unexpired we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including professional charges.
An example of a Freehold Enfranchisement decision for a Soho premises is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case was in relation to 1 flat. The remaining number of years on the lease was 73.26 years.