Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Stow on the Wold. Inevitably, the term of lease left reduces over time. This may pass by relatively unnoticed when the flat or house has to be sold or refinanced. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Qualifying leaseholders in Stow on the Wold have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do give due deliberation before delaying your Stow on the Wold lease extension. Putting off the cost now likely increases the price you will eventually incur to extend your lease
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Stow on the Wold 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 are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Summer Jake, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Stow on the Wold. Having purchased his flat 18 years previously, the length of the lease was of little bearing. Fortunately, it dawned on him that he would soon be paying an escalated premium for a lease extension. Jake extended the lease at the eleventh hour in January. Jake and the freeholder eventually agreed on sum of £5,500 . If the lease had dipped to less than eighty years, the premium would have become more costly by at least £950.
In 2011 we were called by Dr N Ricardo who, having bought a ground floor flat in Stow on the Wold in January 2002. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Comparative premises in Stow on the Wold with a long lease were valued around £270,000. The average amount of ground rent was £55 collected monthly. The lease finished on 13 April 2100. Given that there were 74 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
In 2013 we were phoned by Mrs S Sharif who, having owned a first floor flat in Stow on the Wold in September 2004. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Comparable homes in Stow on the Wold with 100 year plus lease were in the region of £166,400. The average amount of ground rent was £60 invoiced every twelve months. The lease concluded on 11 February 2080. Taking into account 54 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.