It’s an underpublicised certainty that a Stroud residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Stroud property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be due. Most flat owners in Stroud will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Stroud with over 100 years left on the lease are sometimes referred to as ‘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 service charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaing from the start of the mortgage. |
Lease extensions in Stroud can be a difficult process. We recommend you obtain guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Stroud lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ali was the the leasehold proprietor of a conversion apartment in Stroud on the market with a lease of a little over 59 years remaining. Ali informally approached his landlord being a well known local-based freehold company for a lease extension. The landlord was keen 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 doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ali to exercise his statutory right. Ali obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the flat.
In 2009 we were approached by Mr and Mrs. H Anderson who, having bought a purpose-built apartment in Stroud in January 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Stroud with 100 year plus lease were in the region of £245,000. The average ground rent payable was £50 collected quarterly. The lease elapsed on 26 March 2090. Having 68 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
Last Winter we were phoned by Dr V Kelly , who was assigned a lease of a first floor apartment in Stroud in November 1996. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Identical homes in Stroud with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 billed yearly. The lease expiry date was on 5 October 2101. Having 79 years left we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including professional charges.