When it comes to long leasehold premises in Stockwood, you effectively rent it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are less than eighty years left. Leasehold owners in Stockwood with a lease approaching 81 years unexpired should seriously think of extending it without delay. When the lease term has under eighty years outstanding, under the relevant statute the landlord can calculate and charge a larger amount, assessed on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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; |
| Chelsea 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Stockwood leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Hugo was the the leasehold proprietor of a studio flat in Stockwood being marketed with a lease of a little over 72 years left. Hugo on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Hugo to exercise his statutory right. Hugo obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2010 we were called by Mr Y Alexander who, having completed a one bedroom apartment in Stockwood in April 2001. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative flats in Stockwood with a long lease were in the region of £265,000. The mid-range ground rent payable was £50 invoiced yearly. The lease concluded on 2 June 2098. Having 73 years remaining we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.
Last Spring we were approach by Mr and Mrs. R Cook , who acquired a basement apartment in Stockwood in September 2008. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Comparative properties in Stockwood with 100 year plus lease were in the region of £264,000. The average ground rent payable was £60 collected every twelve months. The lease ran out in 2078. Having 53 years unexpired we approximated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of costs.