Stonehouse leases on residential properties are gradually losing value. Where your lease has in the region of ninety years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you start incurring an additional element called marriage value. Flat owners in Stonehouse will usually qualify for a lease extension; however It would be wise to check with a conveyancer to confirm if you qualify. In certain cases you may not qualify. There are also strict timetables and procedures to comply with once the process is initiated so it’s best to be guided by a conveyancer during the process.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the premises will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 be at least 75 years plus the term of the mortgage at the outset 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. |
Regardless of whether you are a tenant or a freeholder in Stonehouse,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Stonehouse valuers.
James was the the leasehold owner of a conversion apartment in Stonehouse on the market with a lease of a little over sixty years outstanding. James on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were James to exercise his statutory right. James obtained expert advice and secured satisfactory resolution informally and ending up with a market value flat.
Last Summer we were phoned by Dr Michael Cook , who moved into a newly refurbished apartment in Stonehouse in January 1999. The question was if we could estimate the price would likely be for a 90 year lease extension. Similar flats in Stonehouse with a long lease were valued around £203,200. The mid-range amount of ground rent was £65 invoiced quarterly. The lease expired on 14 January 2087. Given that there were 61 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 plus costs.
Dr O David completed a one bedroom apartment in Stonehouse in February 1997. 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. Identical homes in Stonehouse with a long lease were in the region of £260,000. The mid-range ground rent payable was £50 collected per annum. The lease lapsed in 2098. Taking into account 72 years outstanding we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus legals.