Why you should start your Stroud lease extension

Top reasons for lease extension now:

A Stroud lease depreciates with the years remaining on the lease.

The market value of Stroud leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the remaining term is below than eighty years

An extended lease is almost the same value as a freehold

Leasehold premises in Stroud with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.

Lenders will not issue a mortgage on a short lease

The trend since 2008 has been for lenders to tighten lending requirements across the board - this has extended to the property over which the home loan is to be charged. This has resulted in the unexpired lease term required by banks has increased. Historically mortgage companies were content with 25 years plus the term of the loan - typically fifty year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many now have a minimum term of 75 years as a prerequisite.

What makes us experts in Stroud lease extensions?

Regardless of whether you are a tenant or a freeholder in Stroud,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Stroud valuers.

Stroud Lease Extension Example Cases:

Mason, Stroud, Gloucestershire

In 2014 Mason, started to get close to the 80-year threshold with the lease on his ground floor apartment in Stroud. In buying his home 19 years previously, the lease term was of no relevance. Luckily, he recognised he needed to take steps soon on Extending the lease. Mason arranged for a lease extension just in the nick of time in June. Mason and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If the lease had dipped to less than 80 years, the sum would have become more exhorbitant by a minimum £950.

Stroud case:

Last month we were contacted by Mr and Mrs. M Garcia , who owned a recently refurbished apartment in Stroud in May 2008. We are asked if we could approximate the price would be for a 90 year extension to my lease. Identical properties in Stroud with an extended lease were valued about £173,800. The average ground rent payable was £60 invoiced yearly. The lease elapsed in 2081. Taking into account 55 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 not including expenses.

Stroud case:

In 2013 we were contacted by Dr Stephanie Ali who, having completed a one bedroom apartment in Stroud in August 2008. The question was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable premises in Stroud with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 collected per annum. The lease expired in 2092. Taking into account 66 years left we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.