Stone leases on residential properties are gradually losing 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 allowing qualifying Stone residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stone you should check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately 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 many years ahead.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Stone can be a difficult process. We recommend you secure guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Stone lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Owen owned a 2 bedroom apartment in Stone on the market with a lease of a few days over 59 years left. Owen informally approached his landlord a well known London-based freehold company for a lease extension. The freeholder 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 doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Owen to exercise his statutory right. Owen obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the flat.
Last Christmas we were called by Dr G Jackson , who was assigned a lease of a purpose-built apartment in Stone in August 2003. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar premises in Stone with 100 year plus lease were worth £191,000. The average ground rent payable was £65 collected every twelve months. The lease ran out in 2083. Taking into account 58 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 plus professional charges.
In 2014 we were e-mailed by Mr and Mrs. V Roux who, having completed a one bedroom apartment in Stone in February 2010. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative residencies in Stone with a long lease were valued about £250,000. The average amount of ground rent was £50 invoiced per annum. The lease finished on 10 July 2094. Given that there were 69 years as a residual term we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus expenses.