The re-sale value of a leasehold property in Stourbridge is impacted by how many years the lease has remaining. If it is near to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that formalities can be concluded in advance of the 80 year cut off point. Current legislation enables Stourbridge qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Irrespective of whether you are a tenant or a landlord in Stourbridge,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stourbridge valuers.
Last year Alex, started to get near to the 80-year threshold with the lease on his one bedroom apartment in Stourbridge. Having bought his home two decades ago, the length of the lease was of no significance. Fortunately, he recognised he needed to take steps soon on Extending the lease. Alex arranged for a lease extension at the eleventh hour last April. Alex and the freeholder in the end agreed on an amount of £6,000 . If the lease had dropped below eighty years, the figure would have gone up by at least £900.
Dr J Roux owned a basement apartment in Stourbridge in February 2002. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative flats in Stourbridge with an extended lease were in the region of £264,000. The mid-range amount of ground rent was £60 invoiced annually. The lease lapsed on 2 January 2078. Considering the 53 years outstanding we calculated the premium to the freeholder to extend the lease to be within £37,100 and £42,800 not including costs.
In 2009 we were phoned by Mrs Sophie Martínez who, having bought a first floor flat in Stourbridge in July 2001. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Identical homes in Stourbridge with 100 year plus lease were worth £225,400. The average ground rent payable was £45 billed yearly. The lease ended on 21 October 2089. Given that there were 64 years remaining we approximated the compensation to the landlord for the lease extension to be within £16,200 and £18,600 not including expenses.