Stone Cross leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. If lease term is less than eighty years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Stone Cross will usually qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
It is generally accepted that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Stone Cross 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.
Off the back of unsuccessful correspondence with the freeholder of her basement flat in Stone Cross, Mia commenced the lease extension process just as the lease was approaching the all-important 80-year threshold. The legal work completed in January 2008. The freeholder’s costs were negotiated to about 450 pounds.
In 2010 we were called by Ms W Laurent who, having bought a newly refurbished flat in Stone Cross in January 1995. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar residencies in Stone Cross with an extended lease were worth £210,000. The average ground rent payable was £50 billed quarterly. The lease elapsed on 14 June 2104. Taking into account 79 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.
Mr and Mrs. S Wilson purchased a first floor apartment in Stone Cross in July 2007. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Comparative homes in Stone Cross with 100 year plus lease were worth £275,000. The average ground rent payable was £45 collected every twelve months. The lease finished on 28 April 2093. Considering the 68 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including expenses.