Stansted leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Stansted enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Stansted you would be well advised to see if your lease has between seventy and ninety years remaining. There are compelling reasons why a Stansted flat owner with a lease having around eighty years left should take steps to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
Using our service gives you better control over the value of your Stansted leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Tyler, came seriously near to the eighty-year threshold with the lease on his first floor apartment in Stansted. In buying his property two decades ago, the length of the lease was of no importance. Luckily, he became aware that he needed to take action soon on a lease extension. Tyler was able to extend his lease just under the wire last April. Tyler and the freeholder in the end settled on a premium of £5,000 . If the lease had descended to less than eighty years, the figure would have become more costly by at least £950.
Last Winter we were phoned by Mrs H Moore , who owned a ground floor flat in Stansted in March 2011. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative premises in Stansted with a long lease were in the region of £235,200. The mid-range ground rent payable was £45 collected per annum. The lease elapsed on 14 April 2092. Taking into account 66 years as a residual term we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
In 2010 we were contacted by Mr T Peterson who, having acquired a studio apartment in Stansted in April 2009. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative homes in Stansted with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £55 billed yearly. The lease expired in 2103. Having 77 years remaining we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus fees.