It’s an underpublicised certainty that a Strood residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Strood property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining dips below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Strood will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Strood with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Birmingham Midshires | |
| Chelsea Building Society | |
| Virgin | |
| Yorkshire Building Society |
The conveyancing solicitors that we work with handle Strood 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.
Jackson owned a studio flat in Strood on the market with a lease of just over fifty eight years outstanding. Jackson on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jackson to invoke his statutory right. Jackson procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2014 we were called by Dr Seth Wood who, having completed a one bedroom apartment in Strood in August 2011. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar premises in Strood with an extended lease were valued about £280,000. The mid-range amount of ground rent was £45 billed annually. The lease expiry date was in 2095. Given that there were 69 years remaining we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.
Last Winter we were approach by Mr and Mrs. U Thomas , who completed a garden flat in Strood in July 2010. The dilemma was if we could approximate the price could be to extend the lease by 90 years. Similar homes in Strood with a long lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed every twelve months. The lease ended in 2084. Given that there were 58 years outstanding we calculated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including expenses.