Stansted leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Stansted residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stansted you would be well advised to investigate if your lease has between seventy and 90 years left. There are good reasons why a Stansted flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Stansted with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| 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. |
Using our service will provide you enhanced control over the value of your Stansted leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Dylan owned a conversion apartment in Stansted being marketed with a lease of just over fifty eight years outstanding. Dylan informally contacted his landlord a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Dylan to invoke his statutory right. Dylan obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Last Spring we were approach by Mr and Mrs. B Hall , who took over the lease of a ground floor apartment in Stansted in March 2007. We are asked if we could estimate the price could be for a 90 year extension to my lease. Identical properties in Stansted with 100 year plus lease were valued about £280,000. The average amount of ground rent was £55 invoiced annually. The lease ended in 2104. Given that there were 78 years unexpired we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including expenses.
In 2011 we were called by Mr and Mrs. Y Bailey who, having acquired a one bedroom flat in Stansted in January 2007. We are asked if we could estimate the premium would be to extend the lease by ninety years. Identical residencies in Stansted with a long lease were in the region of £191,000. The average amount of ground rent was £65 collected monthly. The lease expiry date was on 9 September 2084. Considering the 58 years left we approximated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 plus costs.