When it comes to long leasehold property in Stroud, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are less than eighty years left. Residents in Stroud with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. Once the lease term has fewer than 80 years left, under the current statute the landlord can calculate and charge a greater premium, based on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Stroud with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Yorkshire 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. |
The conveyancers that we work with handle Stroud 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.
Ibrahim was the the leasehold owner of a studio flat in Stroud being marketed with a lease of fraction over 72 years left. Ibrahim informally approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Ibrahim to exercise his statutory right. Ibrahim obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last Spring we were e-mailed by Mr and Mrs. J Phillips , who took over the lease of a ground floor flat in Stroud in October 2010. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Similar homes in Stroud with an extended lease were worth £290,000. The average amount of ground rent was £60 invoiced quarterly. The lease finished in 2106. Considering the 80 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus costs.
Last Winter we were e-mailed by Dr Lydia Pérez , who acquired a basement apartment in Stroud in March 2010. We are asked if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Similar flats in Stroud with 100 year plus lease were worth £200,800. The average ground rent payable was £65 billed per annum. The lease finished on 13 April 2086. Given that there were 60 years left we approximated the compensation to the freeholder to extend the lease to be between £20,900 and £24,200 not including costs.