Unfortunately that a Stafford 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 first few years due to the loss of value being disguised by increases in the Stafford property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term dips 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 Stafford will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancer we work with provide it.
Kai was the the leasehold owner of a 2 bedroom apartment in Stafford being marketed with a lease of a few days over fifty eight years left. Kai informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Kai to invoke his statutory right. Kai obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.
In 2011 we were contacted by Mr and Mrs. B Davis who, having bought a recently refurbished flat in Stafford in July 1995. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative properties in Stafford with an extended lease were worth £208,200. The average ground rent payable was £65 collected quarterly. The lease ended on 24 January 2087. Considering the 61 years left we calculated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 not including expenses.
In 2009 we were approached by Dr Chloe Pérez who, having took over the lease of a first floor apartment in Stafford in March 2008. The dilemma was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Similar residencies in Stafford with a long lease were worth £260,000. The average amount of ground rent was £50 invoiced yearly. The lease expired on 23 June 2098. Having 72 years left we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.