The re-sale value of a leasehold property in Stow on the Wold depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years to run so that a lease extension can be addressed ahead of the 80 year cut off point. Current legislation enables Stow on the Wold qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of 90 years. The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Stow on the Wold with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 procure 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 conveyancing solicitor we work with provide it.
Last October Connor, came seriously close to the eighty-year threshold with the lease on his one bedroom flat in Stow on the Wold. In buying his property twenty years previously, the lease term was of minimal significance. Thankfully, it dawned on him that he needed to take steps soon on a lease extension. Connor extended the lease at the eleventh hour in August. Connor and the landlord who owned the flat above subsequently agreed on the final figure of £6,000 . If he failed to meet the deadline, the premium would have gone up by at least £1,150.
Mr and Mrs. C Adams purchased a first floor apartment in Stow on the Wold in April 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Similar premises in Stow on the Wold with 100 year plus lease were in the region of £254,200. The average ground rent payable was £60 invoiced yearly. The lease termination date was in 2076. Given that there were 51 years left we estimated the compensation to the freeholder for the lease extension to be between £43,700 and £50,600 exclusive of expenses.
In 2010 we were phoned by Mrs I Simon who, having took over the lease of a one bedroom apartment in Stow on the Wold in November 1997. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable properties in Stow on the Wold with a long lease were worth £210,600. The average ground rent payable was £45 invoiced every twelve months. The lease expiry date was on 21 March 2087. Having 62 years left we approximated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.