The re-sale value of a leasehold property in Stokesley depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that formalities can be addressed well before the 80 year cut off point. Statute entitles Stokesley qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| 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. |
Using our service will provide you increased control over the value of your Stokesley leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful discussions with the landlord of her leasehold apartment in Stokesley, Lily started the lease extension process as the eighty year threshold was rapidly coming. The lease extension completed in August 2008. The landlord’s charges were negotiated to about 700 GBP.
In 2012 we were e-mailed by Mr P Davis who, having purchased a newly refurbished flat in Stokesley in November 2007. The question was if we could estimate the premium could be for a 90 year lease extension. Identical residencies in Stokesley with an extended lease were worth £193,400. The mid-range amount of ground rent was £65 collected monthly. The lease finished in 2085. Taking into account 59 years outstanding we calculated the premium to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of fees.
Last November we were e-mailed by Dr Zachary Bertrand , who moved into a basement apartment in Stokesley in April 1998. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Comparable flats in Stokesley with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected annually. The lease expired on 22 July 2096. Having 70 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £10,500 and £12,000 not including costs.