It’s a harsh certainty that a Stow on the Wold residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Stow on the Wold property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher premium will be payable. Most leasehold owners in Stow on the Wold will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold residencies in Stow on the Wold with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify 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. |
| Bank of Scotland | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you increased 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.
Ryan owned a 2 bedroom apartment in Stow on the Wold being marketed with a lease of a little over 72 years left. Ryan informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Ryan to exercise his statutory right. Ryan obtained expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Christmas we were approach by Dr Rebecca Brooks , who took over the lease of a one bedroom flat in Stow on the Wold in November 1995. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar properties in Stow on the Wold with a long lease were in the region of £225,400. The mid-range ground rent payable was £45 invoiced yearly. The lease elapsed in 2090. Given that there were 64 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of professional charges.
Last Christmas we were contacted by Mr and Mrs. R Gray , who bought a ground floor apartment in Stow on the Wold in January 1998. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Identical residencies in Stow on the Wold with an extended lease were in the region of £270,000. The mid-range ground rent payable was £55 collected annually. The lease elapsed on 10 August 2101. Given that there were 75 years as a residual term we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.