It’s a harsh truth that a Stotfold residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Stotfold property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Stotfold will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you increased control over the value of your Stotfold leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kian owned a 2 bedroom flat in Stotfold being marketed with a lease of a few days over 61 years unexpired. Kian on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Kian to invoke his statutory right. Kian procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Last Autumn we were phoned by Dr U Gray , who owned a one bedroom apartment in Stotfold in August 2007. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Identical flats in Stotfold with a long lease were valued around £200,000. The mid-range amount of ground rent was £50 billed monthly. The lease lapsed on 14 October 2102. Given that there were 77 years outstanding we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including legals.
Last Spring we were phoned by Mr and Mrs. O Lefèvre , who purchased a one bedroom apartment in Stotfold in May 2009. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Similar flats in Stotfold with a long lease were worth £265,200. The mid-range ground rent payable was £65 invoiced per annum. The lease expired on 6 April 2091. Taking into account 66 years left we approximated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 plus legals.