It’s an underpublicised certainty that a Stilton residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Stilton property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining falls under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Stilton will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
Leasehold residencies in Stilton with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The conveyancers that we work with procure Stilton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last year Noah, came very near to the eighty-year mark with the lease on his two bedroom apartment in Stilton. In buying his flat two decades ago, the lease term was of little relevance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Noah extended the lease at the eleventh hour in May. Noah and the freeholder via the managing agents in the end agreed on sum of £5,500 . If he failed to meet the deadline, the amount would have increased by at least £875.
In 2012 we were phoned by Mr William Hernández who, having owned a purpose-built flat in Stilton in October 2000. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Comparable residencies in Stilton with a long lease were valued about £183,600. The mid-range amount of ground rent was £65 collected per annum. The lease elapsed in 2082. Taking into account 57 years as a residual term we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus costs.
Last year we were approach by Mr and Mrs. P Young , who purchased a garden flat in Stilton in January 2011. We are asked if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Similar premises in Stilton with a long lease were worth £245,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease elapsed in 2093. Given that there were 68 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.