On the balance of probabilities if you own a flat in Old Stratford you actually own a long leasehold interest over your property
Leasehold properties in Old Stratford with over one hundred 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 home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Old 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 conveyancing solicitor we work with provide it.
In the wake of eight months of lengthy discussions with the landlord of her ground floor apartment in Old Stratford, Ella commenced the lease extension process just as her lease was nearing the crucial eighty-year threshold. The transaction completed in May 2009. The landlord’s fees were negotiated to about 600 GBP.
Last Winter we were phoned by Dr G Morgan , who purchased a studio apartment in Old Stratford in July 2006. The dilemma was if we could estimate the premium would be to prolong the lease by a further 90 years. Similar flats in Old Stratford with 100 year plus lease were valued about £260,000. The average amount of ground rent was £50 invoiced every twelve months. The lease elapsed in 2098. Given that there were 72 years left we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.
In 2013 we were contacted by Mrs Jade Phillips who, having took over the lease of a recently refurbished flat in Old Stratford in October 2000. The question was if we could approximate the price would likely be to extend the lease by ninety years. Comparative premises in Old Stratford with 100 year plus lease were in the region of £256,600. The mid-range ground rent payable was £60 invoiced every twelve months. The lease lapsed in 2078. Having 52 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 exclusive of fees.