It’s a harsh certainty that a Stanley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Stanley property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher amount will be due. The majority of flat owners in Stanley will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Stanley leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Andrew, came critically close to the 80-year threshold with the lease on his garden apartment in Stanley. In buying his flat two decades ago, the lease term was of little importance. by good luck, he recognised he needed to take steps soon on Extending the lease. Andrew arranged for a lease extension just ahead of time in April. Andrew and the freeholder in the end agreed on a premium of £5,000 . If the lease had slipped lower than 80 years, the premium would have increased by a minimum £900.
Mr and Mrs. J Jones was assigned a lease of a basement apartment in Stanley in June 1995. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Identical homes in Stanley with 100 year plus lease were worth £245,000. The average amount of ground rent was £50 billed monthly. The lease finished in 2093. Given that there were 68 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.
In 2012 we were phoned by Mr and Mrs. W Roux who, having moved into a basement flat in Stanley in March 2005. The question was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Similar homes in Stanley with 100 year plus lease were worth £285,000. The average ground rent payable was £55 invoiced per annum. The lease ended in 2104. Considering the 79 years unexpired we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of costs.