Unfortunately that a Stotfold residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Stotfold property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher amount will be due. Most flat owners in Stotfold will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Regardless of whether you are a tenant or a landlord in Stotfold,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Stotfold valuers.
In recent months Adam, started to get near to the eighty-year mark with the lease on his studio flat in Stotfold. In buying his property two decades ago, the length of the lease was of little interest. Luckily, he recognised he needed to take action soon on a lease extension. Adam arranged for a lease extension just under the wire last March. Adam and the landlord who owned the flat above subsequently settled on the final figure of £5,500 . If the lease had slid lower than eighty years, the amount would have escalated by at least £1,125.
In 2010 we were called by Mr and Mrs. B Simon who, having acquired a one bedroom apartment in Stotfold in September 2009. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparative homes in Stotfold with 100 year plus lease were in the region of £250,400. The average ground rent payable was £65 collected every twelve months. The lease terminated on 25 November 2090. Given that there were 64 years left we estimated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 plus costs.
Mr and Mrs. Y Jones purchased a basement apartment in Stotfold in March 2007. The dilemma was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable premises in Stotfold with a long lease were worth £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease ran out in 2079. Taking into account 53 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.