It’s an underpublicised truth that a Stilton residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Stilton property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be payable. Most leasehold owners in Stilton will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold premises in Stilton with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your Stilton leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
14 months ago Daniel, came perilously close to the eighty-year threshold with the lease on his basement apartment in Stilton. Having bought his flat 18 years ago, the length of the lease was of little interest. Luckily, he recognised he would imminently be paying an inflated amount for a lease extension. Daniel extended the lease just in the nick of time in June. Daniel and the landlord eventually agreed on an amount of £5,500 . If he failed to meet the deadline, the figure would have increased by a minimum £900.
In 2013 we were approached by Dr O Scott who, having completed a newly refurbished flat in Stilton in July 1999. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Identical flats in Stilton with 100 year plus lease were in the region of £285,000. The average ground rent payable was £55 invoiced yearly. The lease expired in 2105. Taking into account 79 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.
In 2012 we were called by Ms Georgina Watson who, having took over the lease of a newly refurbished flat in Stilton in June 2012. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Comparable flats in Stilton with a long lease were in the region of £193,400. The average ground rent payable was £65 billed every twelve months. The lease ran out on 22 February 2085. Given that there were 59 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 plus expenses.