Stone Cross leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Stone Cross residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stone Cross you would be well advised to check if your lease has between seventy and 90 years left. There are good reasons why a Stone Cross leaseholder with a lease having around eighty years left should take steps to ensure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent 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 in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a freeholder in Stone Cross,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stone Cross valuers.
Elijah owned a 2 bedroom apartment in Stone Cross on the market with a lease of just over 61 years remaining. Elijah on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert legal guidance and secured an acceptable deal informally and sell the flat.
Dr Ethan Roux moved into a one bedroom flat in Stone Cross in March 2011. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar premises in Stone Cross with an extended lease were valued around £230,800. The average amount of ground rent was £60 billed quarterly. The lease ran out in 2085. Given that there were 60 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £24,700 and £28,600 exclusive of expenses.
Mr and Mrs. C Thomas acquired a first floor apartment in Stone Cross in February 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Similar residencies in Stone Cross with a long lease were worth £166,800. The mid-range amount of ground rent was £50 billed yearly. The lease elapsed on 4 January 2075. Given that there were 50 years outstanding we calculated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of professional charges.