Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Stow on the Wold. Inevitably, the length of lease remaining reduces over time. This is often ignored and only becomes a problem when the property needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension. Qualifying leaseholders in Stow on the Wold have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. You should give careful consideration before putting off your Stow on the Wold lease extension. Putting off the cost now only increases the price you will ultimately incur for a lease extension
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with handle 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.
Leo owned a 2 bedroom apartment in Stow on the Wold being sold with a lease of fraction over 61 years left. Leo informally contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Leo to exercise his statutory right. Leo obtained expert advice and secured an acceptable deal informally and sell the property.
In 2014 we were approached by Mr and Mrs. C Clarke who, having bought a first floor apartment in Stow on the Wold in April 2009. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparable homes in Stow on the Wold with an extended lease were valued around £225,400. The mid-range amount of ground rent was £45 collected monthly. The lease came to a finish on 22 November 2089. Considering the 64 years left we calculated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 not including legals.
Mr and Mrs. V Moore owned a one bedroom flat in Stow on the Wold in February 2001. The question was if we could approximate the premium could be for a 90 year extension to my lease. Comparative homes in Stow on the Wold with an extended lease were in the region of £270,000. The mid-range ground rent payable was £55 billed every twelve months. The lease elapsed in 2100. Given that there were 75 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.