It’s an underpublicised certainty that a Stow on the Wold residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Stow on the Wold property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be due. Most flat owners in Stow on the Wold will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 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 |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Stow on the Wold leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Owen was the the leasehold proprietor of a 2 bedroom apartment in Stow on the Wold on the market with a lease of fraction over 59 years left. Owen informally spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Owen to invoke his statutory right. Owen procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2014 we were called by Ms D Moreau who, having owned a one bedroom flat in Stow on the Wold in August 1996. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative properties in Stow on the Wold with a long lease were valued about £280,000. The average ground rent payable was £55 invoiced quarterly. The lease finished in 2102. Given that there were 77 years left we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including fees.
Last Christmas we were phoned by Mr and Mrs. A Johnson , who owned a first floor flat in Stow on the Wold in November 2006. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative flats in Stow on the Wold with a long lease were valued about £183,600. The mid-range ground rent payable was £65 billed monthly. The lease elapsed on 6 August 2082. Having 57 years remaining we approximated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 plus legals.