Stockwood 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 the lease gets more expensive. Most owners of residential leasehold property in Stockwood enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Stockwood you must check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service gives you increased control over the value of your Stockwood leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Kian owned a 2 bedroom flat in Stockwood being sold with a lease of a little over 59 years unexpired. Kian informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Kian to invoke his statutory right. Kian procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
Dr G Bonnet acquired a garden flat in Stockwood in August 2004. The question was if we could approximate the price would be for a 90 year extension to my lease. Comparative properties in Stockwood with 100 year plus lease were valued about £254,200. The average ground rent payable was £60 invoiced quarterly. The lease terminated on 18 April 2077. Having 51 years left we calculated the premium to the freeholder for the lease extension to be between £43,700 and £50,600 plus legals.
In 2011 we were approached by Dr Imogen Rodríguez who, having took over the lease of a one bedroom apartment in Stockwood in October 2005. We are asked if we could estimate the premium could be to extend the lease by ninety years. Similar properties in Stockwood with a long lease were valued about £210,600. The mid-range ground rent payable was £45 collected annually. The lease elapsed on 25 April 2088. Considering the 62 years left we estimated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of costs.