Unfortunately that a Great Stanmore residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Great Stanmore property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term slips under 80 years, you will end up paying half 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 Great Stanmore will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold premises in Great Stanmore with more than one hundred years left 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 upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| 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. |
| 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 |
The conveyancers that we work with undertake Great Stanmore 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.
Hugo owned a 2 bedroom apartment in Great Stanmore being sold with a lease of a little over 72 years left. Hugo informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Hugo to exercise his statutory right. Hugo obtained expert advice and secured satisfactory resolution informally and readily saleable.
In 2012 we were contacted by Dr W Gray who, having moved into a purpose-built apartment in Great Stanmore in January 2007. The question was if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Comparative homes in Great Stanmore with an extended lease were in the region of £256,600. The average amount of ground rent was £60 collected annually. The lease ended on 10 January 2077. Given that there were 52 years left we estimated the premium to the landlord for the lease extension to be within £41,800 and £48,400 exclusive of professional charges.
An example of a Lease Extension decision for a Great Stanmore residence is 27B Hillside in February 2010. the resulting premium, all other aspects of the valuation having been agreed between the parties was set at £8,250 This case affected 1 flat. The unexpired term as at the valuation date was 70.25 years.