The rule of thumb is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Stow on the Wold can extend the lease for an additional ninety years under statute. Do think carefully before delaying your Stow on the Wold lease extension. Shelving that expense today simply escalates the price you will ultimately be required to pay to extend the lease.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Stow on the Wold 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 lawyer we work with provide it.
Jason was the the leasehold proprietor of a 2 bedroom apartment in Stow on the Wold being sold with a lease of just over 61 years unexpired. Jason on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Jason to exercise his statutory right. Jason obtained expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Mr and Mrs. B Howard was assigned a lease of a one bedroom flat in Stow on the Wold in September 2003. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar premises in Stow on the Wold with a long lease were worth £193,400. The mid-range ground rent payable was £65 invoiced monthly. The lease lapsed on 7 April 2084. Taking into account 59 years outstanding we estimated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 not including fees.
In 2011 we were e-mailed by Ms Sophia Smith who, having acquired a recently refurbished apartment in Stow on the Wold in August 2007. The question was if we could estimate the price would likely be for a 90 year lease extension. Comparable residencies in Stow on the Wold with 100 year plus lease were valued about £255,000. The average amount of ground rent was £50 billed quarterly. The lease end date was on 13 January 2095. Taking into account 70 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £10,500 and £12,000 plus expenses.