When it comes to domestic leasehold property in Stowmarket, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than eighty years left. Residents in Stowmarket with a lease drawing near to 81 years remaining should seriously consider extending it sooner than later. When a lease has below eighty years left, under the relevant statute the landlord is entitled to calculate and demand a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Coventry Building Society | 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. |
| 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. |
The lawyers that we work with undertake Stowmarket 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 lawyer we work with provide it.
After lengthy discussions with the landlord of her two bedroom flat in Stowmarket, Isobel initiated the lease extension process as the 80 year mark was quickly coming. The lease extension completed in July 2014. The landlord’s costs were kept to an absolute minimum.
In 2014 we were contacted by Mrs Bethan García who, having acquired a newly refurbished apartment in Stowmarket in October 2005. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Comparative flats in Stowmarket with 100 year plus lease were in the region of £198,800. The average amount of ground rent was £55 billed per annum. The lease terminated in 2081. Having 55 years as a residual term we estimated the premium to the landlord for the lease extension to be between £33,300 and £38,400 not including expenses.
Last Winter we were e-mailed by Mr and Mrs. B Robinson , who owned a ground floor apartment in Stowmarket in October 2002. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Identical homes in Stowmarket with an extended lease were valued around £295,000. The average amount of ground rent was £45 invoiced every twelve months. The lease ended on 20 September 2101. Having 75 years left we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of expenses.