The market value of Stroud leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase materialy once the unexpired lease term is less than 80 years
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Stroud,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Stroud valuers.
Last October Evan, started to get close to the eighty-year mark with the lease on his purpose- built apartment in Stroud. Having bought his property two decades ago, the lease term was of minimal importance. Fortunately, he became aware that he would soon be paying way over the odds for a lease extension. Evan was able to extend his lease just in the nick of time last January. Evan and the freeholder via the managing agents eventually settled on a premium of £5,500 . If the lease had fallen lower than eighty years, the figure would have become more exhorbitant by at least £875.
Mr and Mrs. D Lefebvre purchased a recently refurbished flat in Stroud in June 1998. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Identical flats in Stroud with 100 year plus lease were valued around £198,400. The mid-range ground rent payable was £65 billed annually. The lease finished on 9 August 2084. Taking into account 59 years unexpired we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of costs.
Dr U Sánchez acquired a one bedroom apartment in Stroud in April 1998. The question was if we could approximate the premium could be to extend the lease by ninety years. Identical residencies in Stroud with 100 year plus lease were in the region of £255,000. The mid-range ground rent payable was £50 invoiced annually. The lease elapsed on 17 February 2095. Taking into account 70 years unexpired we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including legals.