Stonehouse 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. It is the case that most Stonehouse tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Stonehouse you would be well advised to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in Stonehouse with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Stonehouse 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 conveyancer we work with provide it.
During the course of the last few months Blake, started to get near to the 80-year mark with the lease on his first floor flat in Stonehouse. In buying his property 19 years previously, the unexpired term was of little bearing. Fortunately, he recognised he needed to take action soon on Extending the lease. Blake arranged for a lease extension at the eleventh hour last August. Blake and the freeholder via the management company subsequently agreed on a premium of £5,000 . If the lease had dipped below eighty years, the price would have become more exhorbitant by at least £1,075.
Ms Bethany Martínez completed a one bedroom apartment in Stonehouse in November 2009. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparative homes in Stonehouse with an extended lease were valued about £285,000. The average amount of ground rent was £55 collected per annum. The lease ran out in 2106. Taking into account 80 years unexpired we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of costs.
In 2013 we were approached by Dr Aarav Pérez who, having bought a basement flat in Stonehouse in January 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Similar properties in Stonehouse with an extended lease were in the region of £200,800. The mid-range ground rent payable was £65 invoiced quarterly. The lease finished on 1 July 2086. Considering the 60 years unexpired we estimated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 plus legals.