Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Stretford. Clearly, the length of lease remaining shortens over time. This may slip by relatively unnoticed when the flat or house needs to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Eligible leaseholders in Stretford have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Please give careful consideration before delaying your Stretford lease extension. Putting off the cost now likely increases the price you will eventually incur for a lease extension
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Stretford 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 lawyer we work with provide it.
In recent months Isaac, started to get near to the eighty-year mark with the lease on his leasehold apartment in Stretford. In buying his flat two decades ago, the length of the lease was of no importance. Luckily, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Isaac extended the lease at the eleventh hour in June. Isaac and the landlord who owned the flat above ultimately agreed on the final figure of £5,000 . If the lease had slid to less than eighty years, the amount would have become more costly by at least £875.
Last month we were contacted by Mrs B Stewart , who was assigned a lease of a first floor apartment in Stretford in January 1999. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Similar premises in Stretford with a long lease were valued around £260,000. The mid-range amount of ground rent was £50 billed quarterly. The lease end date was on 2 November 2095. Given that there were 71 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.
Last Winter we were e-mailed by Mr James Bernard , who acquired a basement flat in Stretford in August 1997. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Identical flats in Stretford with an extended lease were valued around £254,200. The mid-range ground rent payable was £60 billed every twelve months. The lease expired in 2075. Having 51 years outstanding we calculated the premium to the freeholder to extend the lease to be between £43,700 and £50,600 plus expenses.