There is no doubt about it a leasehold property in Stansted is a wasting asset as a result of the diminishing lease term. If the lease has, more than 125 years remaining then this decrease may be of little impact however there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should extend the lease sooner rather than later. Many flat owners in Stansted will meet the qualifying criteria; nevertheless a conveyancer should be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Stansted 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.
After lengthy negotiations with the freeholder of her ground floor flat in Stansted, Rebecca initiated the lease extension process just as the lease was nearing the critical eighty-year mark. The transaction was concluded in August 2006. The freeholder’s charges were negotiated to less than 700 pounds.
Last year we were phoned by Dr M López , who owned a one bedroom apartment in Stansted in August 2002. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Comparable premises in Stansted with 100 year plus lease were in the region of £246,800. The mid-range amount of ground rent was £60 billed annually. The lease finished on 8 March 2075. Considering the 50 years unexpired we calculated the premium to the landlord for the lease extension to be within £44,700 and £51,600 plus costs.
Dr Ali Michel acquired a purpose-built flat in Stansted in June 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Identical residencies in Stansted with a long lease were valued about £208,200. The mid-range amount of ground rent was £65 invoiced monthly. The lease came to a finish in 2086. Taking into account 61 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of fees.