Stroud leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Stroud tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Stroud you must check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Stroud with over 100 years outstanding 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancing solicitors 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.
In the wake of eight months of lengthy discussions with the freeholder of her one bedroom apartment in Stroud, Charlotte initiated the lease extension process as the eighty year mark was swiftly approaching. The transaction completed in November 2007. The landlord’s costs were kept to an absolute minimum.
Mr and Mrs. D Hernández completed a one bedroom flat in Stroud in January 2002. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Comparative homes in Stroud with an extended lease were worth £270,000. The mid-range ground rent payable was £55 collected quarterly. The lease ended in 2101. Taking into account 75 years remaining we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.
Last Summer we were contacted by Mr and Mrs. C Morgan , who bought a newly refurbished apartment in Stroud in April 1998. The question was if we could approximate the premium would be to prolong the lease by ninety years. Similar properties in Stroud with an extended lease were worth £173,800. The mid-range amount of ground rent was £60 invoiced annually. The lease ran out in 2081. Given that there were 55 years left we estimated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 plus legals.