The re-sale value of a leasehold property in Stow on the Wold is impacted by how many years the lease has remaining. If it is near to or fewer than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised ahead of the 80 year mark. Current legislation entitles Stow on the Wold qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Stow on the Wold leasehold, as your property will be more valuable and marketable 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.
Trailing lengthy correspondence with the landlord of her first floor apartment in Stow on the Wold, Stephanie initiated the lease extension process just as her lease was coming close to the all-important 80-year deadline. The legal work was finalised in June 2011. The landlord’s charges were negotiated to a tad over 500 GBP.
Last Spring we were e-mailed by Mr and Mrs. P Scott , who was assigned a lease of a first floor apartment in Stow on the Wold in March 2012. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Identical flats in Stow on the Wold with a long lease were valued around £245,000. The average amount of ground rent was £50 collected monthly. The lease ended on 3 July 2093. Having 68 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2013 we were contacted by Dr Edward Green who, having acquired a one bedroom apartment in Stow on the Wold in January 2007. The question was if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Similar properties in Stow on the Wold with a long lease were valued about £285,000. The average amount of ground rent was £55 billed per annum. The lease ran out on 16 September 2104. Having 79 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of legals.