Chances are that if you own a flat in Stowmarket you actually own a long leasehold interest over your property
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Engaging our service gives you increased control over the value of your Stowmarket leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jamie was the the leasehold owner of a high value flat in Stowmarket being marketed with a lease of fraction over 61 years left. Jamie informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Jamie to invoke his statutory right. Jamie obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were e-mailed by Mrs Erin Laurent who, having moved into a basement apartment in Stowmarket in November 2000. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative flats in Stowmarket with a long lease were worth £210,000. The average ground rent payable was £50 collected every twelve months. The lease lapsed on 28 January 2105. Taking into account 80 years outstanding we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
In 2011 we were approached by Mr and Mrs. S Norbert who, having bought a garden flat in Stowmarket in July 2008. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Comparative residencies in Stowmarket with an extended lease were in the region of £280,000. The average ground rent payable was £45 invoiced every twelve months. The lease expiry date was in 2094. Given that there were 69 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.