The market value of Stow on the Wold leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the unexpired lease term is below than eighty years
Leasehold residencies in Stow on the Wold with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘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 to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Stow on the Wold lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Two years ago Luke, started to get near to the eighty-year mark with the lease on his garden apartment in Stow on the Wold. Having purchased his property two decades ago, the length of the lease was of no relevance. As luck would have it, he became aware that he would soon be paying an inflated amount for Extending the lease. Luke arranged for a lease extension at the eleventh hour last April. Luke and the freeholder eventually agreed on the final figure of £6,000 . If the lease had slipped lower than 80 years, the price would have escalated by at least £1,150.
Last Autumn we were contacted by Mr Ibrahim Ricardo , who was assigned a lease of a studio apartment in Stow on the Wold in September 2005. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable premises in Stow on the Wold with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed monthly. The lease ran out on 10 July 2099. Taking into account 73 years left we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last Summer we were e-mailed by Dr H King , who acquired a purpose-built apartment in Stow on the Wold in March 1998. The question was if we could approximate the premium would be for a ninety year extension to my lease. Comparative flats in Stow on the Wold with a long lease were valued about £264,000. The average amount of ground rent was £60 invoiced monthly. The lease came to a finish on 20 November 2079. Taking into account 53 years left we calculated the compensation to the landlord to extend the lease to be within £37,100 and £42,800 exclusive of fees.