The value of Stafford leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is below than 80 years
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with undertake Stafford 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 2014 Lewis, came seriously near to the 80-year threshold with the lease on his one bedroom apartment in Stafford. In buying his property twenty years previously, the lease term was of minimal relevance. Thankfully, he noticed he would imminently be paying an escalated premium for a lease extension. Lewis extended the lease just under the wire in June. Lewis and the freeholder via the managing agents ultimately settled on a premium of £5,500 . If he failed to meet the deadline, the figure would have increased by a minimum £975.
In 2014 we were approached by Mrs Natasha Lambert who, having completed a first floor flat in Stafford in March 1998. The question was if we could approximate the price would be to prolong the lease by 90 years. Comparative premises in Stafford with an extended lease were valued around £193,400. The mid-range amount of ground rent was £65 billed yearly. The lease concluded on 6 August 2085. Taking into account 59 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 plus costs.
Last Spring we were approach by Mr and Mrs. C Mitchell , who purchased a studio flat in Stafford in October 1998. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparable residencies in Stafford with an extended lease were worth £255,000. The average ground rent payable was £50 billed quarterly. The lease finished on 16 October 2096. Having 70 years left we estimated the premium to the freeholder to extend the lease to be between £10,500 and £12,000 plus professional charges.