Stockport 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 becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Stockport residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stockport you would be well advised to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Lease extensions in Stockport can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Stockport lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Reuben, started to get near to the eighty-year mark with the lease on his studio apartment in Stockport. In buying his home 19 years ago, the length of the lease was of little relevance. by good luck, he realised he would imminently be paying an escalated premium for Extending the lease. Reuben extended the lease just under the wire in June. Reuben and the freeholder via the management company in the end agreed on sum of £5,000 . If the lease had slipped to less than eighty years, the premium would have escalated by at least £900.
Mr and Mrs. B Rivera owned a studio apartment in Stockport in July 1997. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparable flats in Stockport with an extended lease were in the region of £246,800. The average ground rent payable was £60 billed every twelve months. The lease ended in 2074. Given that there were 50 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 plus fees.
Last January we were contacted by Mr M Martinez , who took over the lease of a recently refurbished flat in Stockport in November 2000. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Similar homes in Stockport with an extended lease were in the region of £203,200. The mid-range ground rent payable was £65 billed annually. The lease expiry date was in 2085. Considering the 61 years left we estimated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus costs.