Stonehouse leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Stonehouse enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Stonehouse you really ought to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Stonehouse leasehold, as your property will be more valuable and marketable in terms of lease length should you wish 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.
Jonathan was the the leasehold owner of a 2 bedroom apartment in Stonehouse being sold with a lease of a little over 59 years remaining. Jonathan informally spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jonathan to exercise his statutory right. Jonathan obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last Autumn we were contacted by Mr Austin González , who bought a basement flat in Stonehouse in February 2000. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Similar properties in Stonehouse with a long lease were valued about £260,000. The average ground rent payable was £50 billed annually. The lease concluded on 24 November 2099. Given that there were 73 years remaining we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
Last Summer we were contacted by Mr and Mrs. F Bonnet , who purchased a ground floor apartment in Stonehouse in August 2012. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparative residencies in Stonehouse with an extended lease were in the region of £264,000. The average amount of ground rent was £60 invoiced per annum. The lease finished in 2079. Having 53 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of costs.