There is no doubt about it a leasehold property in Stratford is a wasting asset as a result of the diminishing lease term. Where the lease has, more than one hundred years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending without delay. Many flat owners in Stratford will qualify for this right; that being said a conveyancing solicitor should be able to advise if you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Stratford leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy correspondence with the landlord of her ground floor flat in Stratford, Isabella started the lease extension process just as her lease was nearing the all-important 80-year deadline. The lease extension was finalised in September 2008. The freeholder’s costs were negotiated to slightly above 500 pounds.
Mr and Mrs. U Nelson was assigned a lease of a ground floor flat in Stratford in February 2001. We are asked if we could approximate the price would be to extend the lease by an additional years. Similar properties in Stratford with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease terminated on 9 April 2087. Having 63 years left we approximated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 plus costs.
An example of a Freehold Enfranchisement case for a Stratford premises is 12 Nutfield Road in July 2014. the Tribunal judged that the price to be paid by the applicants for the freehold interest should be £19,572 This case related to 2 flats. The unexpired term as at the valuation date was 72.02 years.