For anyone whose Stansted flat is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Stansted,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 Stansted valuers.
Trailing unsuccessful correspondence with the freeholder of her purpose-built flat in Stansted, Leah started the lease extension process just as the lease was approaching the all-important eighty-year mark. The lease extension completed in April 2013. The freeholder’s fees were restricted to under 650 pounds.
In 2011 we were e-mailed by Ms Georgia Evans who, having owned a newly refurbished flat in Stansted in April 2004. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Comparative premises in Stansted with 100 year plus lease were worth £210,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease came to a finish on 17 January 2088. Having 62 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 not including expenses.
In 2014 we were e-mailed by Mrs C Garcia who, having owned a studio flat in Stansted in November 2003. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparable homes in Stansted with an extended lease were in the region of £265,000. The average amount of ground rent was £50 invoiced quarterly. The lease terminated in 2099. Considering the 73 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus fees.