The market value of a leasehold property in Stockport depends on how long the lease has remaining. If it is near to or less than eighty years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that all matters can be finalised in advance of the 80 year threshold. Leasehold Reform legislation entitles Stockport qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent 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 decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure 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 conveyancer we work with provide it.
Last Christmas Stanley, started to get close to the eighty-year threshold with the lease on his first floor apartment in Stockport. Having purchased his flat two decades ago, the lease term was of little concern. Thankfully, he realised he needed to take action soon on a lease extension. Stanley arranged for a lease extension at the eleventh hour in September. Stanley and the freeholder via the management company subsequently settled on a premium of £5,500 . If the lease had fallen to less than 80 years, the figure would have become more exhorbitant by at least £850.
In 2009 we were e-mailed by Mrs A García who, having took over the lease of a one bedroom apartment in Stockport in January 1998. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical homes in Stockport with 100 year plus lease were in the region of £203,200. The mid-range amount of ground rent was £65 billed per annum. The lease expired on 27 June 2086. Taking into account 61 years left we approximated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 not including professional charges.
Last Spring we were called by Dr H Hall , who moved into a first floor apartment in Stockport in April 2007. The question was if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Similar properties in Stockport with a long lease were valued around £260,000. The mid-range amount of ground rent was £50 billed monthly. The lease ran out on 1 April 2097. Given that there were 72 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus fees.