Stone leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Stone residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stone you must investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
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 further ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Stone 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 lengthy negotiations with the freeholder of her studio apartment in Stone, Bethan initiated the lease extension process just as her lease was approaching the crucial 80-year threshold. The lease extension completed in January 2011. The freeholder’s costs were negotiated to approximately 500 GBP.
In 2012 we were phoned by Mr G Simon who, having owned a garden flat in Stone in March 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Stone with a long lease were valued about £264,000. The average ground rent payable was £60 collected annually. The lease terminated on 28 June 2078. Given that there were 53 years unexpired we estimated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 exclusive of costs.
Last month we were e-mailed by Ms Bethany Leroy , who purchased a purpose-built flat in Stone in January 1998. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparable residencies in Stone with 100 year plus lease were in the region of £225,400. The average amount of ground rent was £45 collected per annum. The lease expired on 26 June 2089. Taking into account 64 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of legals.