The market value of a leasehold property in Stow on the Wold is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that formalities can be concluded well before the 80 year mark. Leasehold Reform legislation entitles Stow on the Wold qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Stow on the Wold with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Coventry Building Society | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you enhanced control over the value of your Stow on the Wold leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Jackson, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Stow on the Wold. In buying his flat two decades ago, the unexpired term was of little interest. As luck would have it, he became aware that he would soon be paying an escalated premium for a lease extension. Jackson was able to extend his lease just ahead of time last January. Jackson and the freeholder in the end agreed on sum of £5,500 . If the lease had gone to less than 80 years, the premium would have become more costly by at least £1,100.
In 2013 we were called by Dr V Morris who, having took over the lease of a first floor apartment in Stow on the Wold in July 2006. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Identical homes in Stow on the Wold with an extended lease were worth £191,000. The average amount of ground rent was £65 invoiced annually. The lease ran out in 2084. Having 58 years left we calculated the compensation to the landlord to extend the lease to be between £23,800 and £27,400 not including expenses.
In 2010 we were called by Mr and Mrs. M Bonnet who, having moved into a first floor apartment in Stow on the Wold in April 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by an additional years. Identical properties in Stow on the Wold with a long lease were in the region of £250,000. The average amount of ground rent was £50 collected annually. The lease elapsed on 3 February 2095. Given that there were 69 years as a residual term we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.