The re-sale value of a leasehold property in Strood depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. Ideally one should start the lease extension process when the lease still has 82 years remaining so that a lease extension can be concluded in advance of the 80 year threshold. Current legislation enables Strood 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 purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Strood,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Strood valuers.
In 2014 Hunter, started to get close to the 80-year mark with the lease on his basement apartment in Strood. In buying his property 18 years previously, the length of the lease was of little concern. Luckily, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Hunter arranged for a lease extension just in the nick of time in May. Hunter and the landlord ultimately agreed on sum of £5,000 . If the lease had slipped below eighty years, the sum would have increased by a minimum £1,050.
Last Autumn we were e-mailed by Dr Eliot Alexander , who completed a one bedroom apartment in Strood in March 2008. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparative premises in Strood with 100 year plus lease were in the region of £225,800. The mid-range ground rent payable was £60 billed every twelve months. The lease concluded in 2086. Having 60 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £24,700 and £28,600 plus legals.
In 2013 we were contacted by Dr Y Robinson who, having owned a recently refurbished apartment in Strood in July 2011. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical premises in Strood with an extended lease were in the region of £210,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease elapsed in 2106. Considering the 80 years outstanding we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus costs.