Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Stockport. Inevitably, the term of lease left reduces over time. This may slip by relatively unnoticed when the property needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible long lease owners in Stockport have the right to extend the lease for an additional 90 years under Leasehold Reform legislation. You should give careful deliberation before putting off your Stockport lease extension. Putting off that expense now likely increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service gives you enhanced control over the value of your Stockport leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Edward owned a studio flat in Stockport being marketed with a lease of just over sixty years left. Edward informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Edward to invoke his statutory right. Edward procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr R Bell took over the lease of a ground floor apartment in Stockport in April 2005. The question was if we could approximate the price would be to prolong the lease by an additional years. Similar premises in Stockport with a long lease were in the region of £275,000. The average ground rent payable was £55 billed yearly. The lease ended in 2102. Given that there were 77 years left we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including expenses.
Last Christmas we were approach by Mr and Mrs. A Wright , who bought a one bedroom flat in Stockport in November 2010. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Identical properties in Stockport with a long lease were worth £183,600. The mid-range amount of ground rent was £65 collected annually. The lease expiry date was on 15 August 2082. Considering the 57 years unexpired we calculated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.