Stotfold leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Stotfold tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Stotfold you must see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
Irrespective of whether you are a tenant or a landlord in Stotfold,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stotfold valuers.
Half a year ago Callum, came seriously close to the eighty-year threshold with the lease on his ground floor flat in Stotfold. In buying his home two decades ago, the length of the lease was of no bearing. by good luck, it dawned on him that he needed to take steps soon on Extending the lease. Callum extended the lease just under the wire in April. Callum and the freeholder via the managing agents subsequently agreed on a premium of £5,500 . If the lease had fallen lower than 80 years, the premium would have increased by at least £1,150.
Last Christmas we were approach by Dr K Morel , who took over the lease of a basement flat in Stotfold in January 2005. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Similar homes in Stotfold with a long lease were worth £171,800. The average ground rent payable was £55 billed per annum. The lease concluded on 2 November 2076. Given that there were 50 years remaining we calculated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 plus costs.
In 2012 we were e-mailed by Dr C Mason who, having owned a purpose-built apartment in Stotfold in June 1996. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparative homes in Stotfold with 100 year plus lease were valued about £280,000. The mid-range ground rent payable was £45 billed yearly. The lease concluded in 2096. Having 70 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus costs.