The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Stratford have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do think carefully before delaying your Stratford lease extension. Putting off that expense now simply escalates the price you will eventually have to pay to extend the lease.
It is generally considered that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancers that we work with procure Stratford 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.
Two years ago Hunter, started to get near to the 80-year mark with the lease on his garden apartment in Stratford. Having purchased his flat twenty years previously, the unexpired term was of no concern. Fortunately, he became aware that he would imminently be paying an inflated amount for Extending the lease. Hunter extended the lease just ahead of time in July. Hunter and the freeholder eventually settled on sum of £5,500 . If the lease had dropped below 80 years, the price would have gone up by at least £1,025.
In 2012 we were contacted by Mr and Mrs. I Baker who, having bought a one bedroom apartment in Stratford in October 2006. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Identical homes in Stratford with 100 year plus lease were valued about £260,000. The average amount of ground rent was £50 collected quarterly. The lease ran out on 13 October 2097. Given that there were 72 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.
An example of a Freehold Enfranchisement decision for a Stratford flat 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.