The market value of Stilton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Stilton leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy discussions with the freeholder of her garden flat in Stilton, Ellie initiated the lease extension process as the 80 year deadline was swiftly advancing. The lease extension was finalised in May 2009. The freeholder’s fees were kept to an absolute minimum.
Last year we were contacted by Mr and Mrs. G Green , who bought a garden flat in Stilton in March 1999. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparable residencies in Stilton with an extended lease were worth £225,400. The mid-range amount of ground rent was £45 billed every twelve months. The lease ran out on 22 May 2090. Taking into account 64 years left we approximated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 plus costs.
Last Autumn we were contacted by Mr and Mrs. I Roberts , who completed a studio apartment in Stilton in November 1997. The question was if we could estimate the price could be to prolong the lease by an additional years. Comparative premises in Stilton with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 billed per annum. The lease ran out in 2101. Having 75 years left we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.