The market value of Stansted 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 significantly once the unexpired lease term is below than eighty years
Leasehold residencies in Stansted with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Engaging our service will provide you enhanced control over the value of your Stansted leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Zachary owned a 2 bedroom apartment in Stansted being sold with a lease of a little over 61 years outstanding. Zachary on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Zachary to exercise his statutory right. Zachary obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
In 2011 we were approached by Mr and Mrs. B Scott who, having acquired a first floor flat in Stansted in February 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Comparable homes in Stansted with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 invoiced per annum. The lease came to a finish on 2 September 2097. Considering the 71 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.
In 2012 we were e-mailed by Dr L Ali who, having completed a first floor flat in Stansted in November 2003. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Stansted with a long lease were valued around £254,200. The average amount of ground rent was £60 invoiced every twelve months. The lease lapsed on 9 February 2077. Considering the 51 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 not including fees.