The re-sale value of a leasehold property in Old Stratford depends on how long the lease has remaining. If it is near to or less than 80 years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. Ideally one should start the lease extension process when the lease still has 82 years to run so that formalities can be addressed prior to the 80 year cut off point. Statute entitles Old Stratford qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Old Stratford with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Old Stratford leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jayden, started to get close to the eighty-year mark with the lease on his basement flat in Old Stratford. In buying his flat two decades ago, the length of the lease was of minimal concern. As luck would have it, he noticed he needed to take action soon on Extending the lease. Jayden arranged for a lease extension at the eleventh hour in April. Jayden and the freeholder via the managing agents ultimately agreed on a premium of £5,000 . If the lease had gone below 80 years, the amount would have escalated by a minimum £1,025.
Dr Austin Fournier completed a first floor apartment in Old Stratford in June 2009. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Comparative flats in Old Stratford with an extended lease were in the region of £285,000. The mid-range ground rent payable was £55 collected monthly. The lease expiry date was in 2105. Given that there were 79 years unexpired we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including fees.
In 2009 we were called by Dr D Rose who, having purchased a garden flat in Old Stratford in June 2005. The question was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical residencies in Old Stratford with an extended lease were in the region of £193,400. The average amount of ground rent was £65 collected quarterly. The lease lapsed in 2085. Having 59 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of fees.