The market value of a leasehold property in Stalybridge is impacted by how long the lease has remaining. If it is near to or fewer than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that formalities can be addressed in advance of the 80 year threshold. Current legislation entitles Stalybridge qualifying lessees to acquire a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
The lawyers that we work with handle Stalybridge 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.
Off the back of unsuccessful discussions with the landlord of her studio flat in Stalybridge, Katherine commenced the lease extension process just as her lease was coming close to the crucial 80-year deadline. The legal work completed in November 2012. The landlord’s fees were kept to an absolute minimum.
Last Autumn we were called by Mr and Mrs. W Evans , who took over the lease of a ground floor apartment in Stalybridge in April 2004. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Comparative homes in Stalybridge with an extended lease were valued about £166,400. The average amount of ground rent was £60 collected quarterly. The lease ran out in 2079. Given that there were 54 years remaining we approximated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus costs.
Last month we were approach by Mr and Mrs. W Anderson , who completed a ground floor apartment in Stalybridge in May 1996. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Identical properties in Stalybridge with 100 year plus lease were valued about £227,800. The average ground rent payable was £45 invoiced quarterly. The lease elapsed on 18 March 2090. Having 65 years remaining we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.