Stockport leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Stockport residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Stockport you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Stockport with in excess of 100 years left on the lease are sometimes 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 to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Stockport can be a difficult process. We recommend you procure guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Stockport lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Kyle was the the leasehold owner of a 2 bedroom apartment in Stockport being marketed with a lease of fraction over 61 years unexpired. Kyle informally contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kyle to exercise his statutory right. Kyle procured expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2013 we were phoned by Mr and Mrs. B Brown who, having bought a ground floor flat in Stockport in November 2004. The question was if we could estimate the premium would likely be to prolong the lease by an additional years. Identical premises in Stockport with a long lease were valued about £186,000. The mid-range amount of ground rent was £65 billed per annum. The lease concluded on 3 February 2084. Given that there were 58 years as a residual term we calculated the premium to the landlord for the lease extension to be between £24,700 and £28,600 plus professional charges.
Dr Omar Clarke took over the lease of a one bedroom apartment in Stockport in September 2005. The question was if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Identical flats in Stockport with an extended lease were valued about £250,000. The average ground rent payable was £50 billed quarterly. The lease lapsed on 7 September 2095. Taking into account 69 years remaining we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.