It’s an underpublicised truth that a Stilton residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Stilton property prices.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below eighty years - otherwise a higher amount will be payable. The majority of flat owners in Stilton will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The lawyers that we work with procure Stilton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Adam was the the leasehold proprietor of a conversion apartment in Stilton on the market with a lease of fraction over 72 years outstanding. Adam on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Adam to exercise his statutory right. Adam obtained expert legal guidance and secured an acceptable resolution without going to tribunal and readily saleable.
In 2013 we were called by Mr and Mrs. U Cooper who, having purchased a ground floor apartment in Stilton in May 2001. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Stilton with a long lease were in the region of £191,000. The mid-range ground rent payable was £65 invoiced every twelve months. The lease termination date was in 2082. Considering the 58 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 plus fees.
Last Autumn we were contacted by Dr Millie Anderson , who completed a studio flat in Stilton in August 2003. The question was if we could approximate the premium would be for a 90 year extension to my lease. Comparable residencies in Stilton with a long lease were valued about £250,000. The average ground rent payable was £50 invoiced per annum. The lease expiry date was in 2093. Considering the 69 years left we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.