Stilton 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 the lease gets more expensive. It is the case that most Stilton tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Stilton you would be well advised to check if your lease has between seventy and 90 years remaining. There are compelling reasons why a Stilton flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
Leasehold properties in Stilton with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Stilton,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stilton valuers.
16 months ago Jayden, came precariously close to the 80-year threshold with the lease on his one bedroom apartment in Stilton. In buying his home 19 years previously, the length of the lease was of no bearing. Thankfully, he became aware that he needed to take steps soon on a lease extension. Jayden extended the lease at the eleventh hour in May. Jayden and the freeholder subsequently settled on the final figure of £5,000 . If the lease had gone to less than 80 years, the premium would have escalated by at least £1,000.
Last Winter we were called by Mr W Cook , who completed a ground floor flat in Stilton in June 1999. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparable properties in Stilton with an extended lease were worth £246,800. The average ground rent payable was £60 collected quarterly. The lease finished on 10 May 2075. Given that there were 50 years unexpired we estimated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of professional charges.
Ms Imogen Nelson purchased a garden flat in Stilton in April 2007. We are asked if we could estimate the premium would be to extend the lease by an additional years. Similar homes in Stilton with an extended lease were valued around £208,200. The mid-range ground rent payable was £65 billed monthly. The lease ended on 3 September 2086. Having 61 years remaining we calculated the premium to the landlord for the lease extension to be within £20,000 and £23,000 plus costs.