The market value of a leasehold property in Stilton is impacted by how many years the lease has remaining. If it is near to or less than 80 years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be addressed well before the eighty year cut off point. Current legislation entitles Stilton qualifying lessees to an additional term of ninety years over and above the existing term, at a peppercorn rent (zero ground rent). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Stilton with more than 100 years unexpired 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| 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. |
| 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. |
| 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 enhanced control over the value of your Stilton leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Elijah, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Stilton. Having bought his home two decades ago, the length of the lease was of no relevance. Thankfully, it dawned on him that he needed to take steps soon on Extending the lease. Elijah was able to extend his lease just in the nick of time last June. Elijah and the landlord ultimately settled on an amount of £6,000 . If he not met the deadline, the figure would have gone up by at least £1,000.
Mr and Mrs. M Cooper acquired a recently refurbished flat in Stilton in November 2001. The dilemma was if we could estimate the premium would be to extend the lease by ninety years. Comparative homes in Stilton with an extended lease were in the region of £260,000. The mid-range amount of ground rent was £50 collected yearly. The lease ran out on 3 July 2098. Taking into account 72 years left we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.
Mr and Mrs. J Johnson bought a purpose-built flat in Stilton in October 2008. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar homes in Stilton with a long lease were valued around £261,600. The average ground rent payable was £60 billed monthly. The lease expired on 18 May 2078. Having 52 years left we approximated the compensation to the landlord for the lease extension to be between £39,000 and £45,000 not including expenses.