Stilton 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. It is the case that most Stilton tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Stilton you must see if your lease has between 70 and 90 years remaining. There are good reasons why a Stilton leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
It is conventional wisdom that a property with more than one hundred 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 property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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 30 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. |
| Yorkshire 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. |
Engaging our service will provide 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 want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the freeholder of her garden flat in Stilton, Mollie started the lease extension process just as her lease was nearing the all-important 80-year threshold. The legal work was concluded in May 2011. The landlord’s costs were kept to an absolute minimum.
In 2014 we were contacted by Mrs Phoebe Murphy who, having took over the lease of a purpose-built flat in Stilton in July 2012. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar residencies in Stilton with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 billed yearly. The lease termination date was in 2097. Having 71 years left we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.
Last Autumn we were e-mailed by Mr Jamie Morel , who completed a basement apartment in Stilton in November 2001. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Identical flats in Stilton with 100 year plus lease were valued around £254,200. The average ground rent payable was £60 billed quarterly. The lease elapsed in 2077. Taking into account 51 years left we calculated the compensation to the landlord to extend the lease to be between £43,700 and £50,600 exclusive of legals.