Stonehouse residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
Leasehold properties in Stonehouse with over one hundred years outstanding 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 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. |
| 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; |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 better control over the value of your Stonehouse leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful discussions with the landlord of her ground floor flat in Stonehouse, Ashleigh initiated the lease extension process just as the lease was approaching the all-important eighty-year deadline. The lease extension completed in September 2010. The landlord’s charges were negotiated to under 450 GBP.
Ms D Gray purchased a one bedroom apartment in Stonehouse in May 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Identical flats in Stonehouse with an extended lease were valued around £280,000. The average ground rent payable was £55 billed quarterly. The lease end date was on 13 February 2103. Given that there were 78 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.
Ms Rachel Reed bought a studio apartment in Stonehouse in March 2006. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Stonehouse with a long lease were worth £186,000. The average amount of ground rent was £65 collected yearly. The lease ended in 2083. Taking into account 58 years outstanding we calculated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 not including professional charges.