When it comes to long leasehold premises in Stow on the Wold, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are fewer than eighty years remaining. Residents in Stow on the Wold with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has below 80 years remaining, under the relevant legislation the landlord is entitled to calculate and charge a greater amount, based on a technical computation, known as “marriage value” which is due.
Leasehold properties in Stow on the Wold with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest 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. |
| Chelsea Building Society | 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. |
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors 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 lawyer we work with provide it.
Last October Mason, started to get close to the 80-year mark with the lease on his purpose- built apartment in Stow on the Wold. Having purchased his flat two decades ago, the lease term was of little importance. As luck would have it, he noticed he needed to take steps soon on a lease extension. Mason was able to extend his lease just under the wire in April. Mason and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If he had missed the deadline, the figure would have increased by at least £850.
In 2014 we were phoned by Dr R Wilson who, having was assigned a lease of a basement flat in Stow on the Wold in June 2005. The dilemma was if we could estimate the premium could be to prolong the lease by ninety years. Comparable homes in Stow on the Wold with an extended lease were valued about £235,200. The average ground rent payable was £45 invoiced quarterly. The lease lapsed in 2092. Taking into account 66 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.
Mr D Pérez owned a first floor flat in Stow on the Wold in June 2011. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Similar flats in Stow on the Wold with a long lease were worth £280,000. The average amount of ground rent was £55 invoiced monthly. The lease concluded on 2 June 2103. Taking into account 77 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.