The market value of Stamford 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 substantially once the remaining term is less than 80 years
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be equivalent in value to 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 are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Stamford,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stamford valuers.
Isaac owned a studio flat in Stamford being marketed with a lease of just over 61 years outstanding. Isaac informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Isaac to invoke his statutory right. Isaac procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Mr and Mrs. A Ricardo owned a ground floor flat in Stamford in April 2010. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Comparable flats in Stamford with 100 year plus lease were valued around £290,000. The average ground rent payable was £45 collected monthly. The lease lapsed on 6 September 2099. Given that there were 73 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.
In 2013 we were e-mailed by Dr Jude Nguyen who, having took over the lease of a ground floor apartment in Stamford in February 2001. The question was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Identical flats in Stamford with an extended lease were worth £240,600. The mid-range ground rent payable was £60 collected every twelve months. The lease ended in 2088. Given that there were 62 years remaining we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of fees.