Stockport residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
Leasehold premises in Stockport with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| 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. |
| 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:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
The lawyers that we work with undertake Stockport 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 conveyancing solicitor we work with provide it.
Finn was the the leasehold owner of a conversion flat in Stockport being marketed with a lease of a little over sixty years left. Finn on an informal basis spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be payable on a lease extension were Finn to exercise his statutory right. Finn obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Mrs Niamh Petit took over the lease of a purpose-built flat in Stockport in March 2000. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable residencies in Stockport with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £55 collected per annum. The lease elapsed on 9 August 2103. Considering the 77 years remaining we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
Mr Luca García bought a first floor apartment in Stockport in November 2007. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Stockport with an extended lease were in the region of £183,600. The average amount of ground rent was £65 invoiced quarterly. The lease end date was in 2083. Taking into account 57 years left we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of legals.