Stockport leases on domestic properties are gradually losing value. Where your lease has approximately ninety years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for the lease extension to be in place before the term of the existing lease falls below eighty years - otherwise a higher amount will be due. Leasehold owners in Stockport will usually be legally entitled to a lease extension; however a solicitor should be able check your eligibility. In some cases you may not qualify. There are prescribed deadlines and formalities to follow once the process is initiated so it’s wise to be guided by a lawyer during the process.
Leasehold residencies in Stockport with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaing from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with undertake Stockport 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 lawyer we work with provide it.
18 months ago Connor, came seriously close to the 80-year mark with the lease on his first floor flat in Stockport. In buying his property 18 years previously, the lease term was of minimal significance. by good luck, it dawned on him that he would soon be paying an inflated amount for a lease extension. Connor was able to extend his lease just under the wire in January. Connor and the freeholder via the management company in the end settled on sum of £5,000 . If the lease had slipped to less than eighty years, the price would have increased by at least £925.
Last year we were contacted by Dr Leon Johnson , who owned a one bedroom apartment in Stockport in March 1998. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar homes in Stockport with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 collected monthly. The lease expired in 2099. Having 76 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.
In 2009 we were contacted by Dr J Williams who, having owned a newly refurbished flat in Stockport in April 2009. We are asked if we could estimate the price could be for a 90 year extension to my lease. Comparative properties in Stockport with an extended lease were in the region of £176,200. The average amount of ground rent was £65 collected annually. The lease ran out on 18 February 2079. Given that there were 56 years outstanding we calculated the compensation to the landlord for the lease extension to be between £29,500 and £34,000 plus legals.