Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Oakwood. Clearly, the period of lease remaining reduces over time. This is often ignored and only becomes a problem when the property needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Qualifying leaseholders in Oakwood have the legal entitlement to extend the lease for an additional ninety years in accordance with Leasehold Reform legislation. Do give careful attention before putting off your Oakwood lease extension. Holding off that expense now only increases the price you will ultimately incur for a lease extension
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Oakwood leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Noah was the the leasehold owner of a 2 bedroom flat in Oakwood on the market with a lease of a little over 72 years remaining. Noah informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be due on a lease extension were Noah to exercise his statutory right. Noah procured expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Spring we were approach by Mr and Mrs. N Petit , who acquired a garden apartment in Oakwood in April 2000. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparative homes in Oakwood with a long lease were valued around £285,000. The mid-range amount of ground rent was £45 collected quarterly. The lease termination date was in 2095. Taking into account 71 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
In 2010 we were called by Mrs Chantelle López who, having moved into a one bedroom apartment in Oakwood in October 1996. The question was if we could approximate the premium could be to prolong the lease by ninety years. Identical premises in Oakwood with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 billed annually. The lease elapsed on 24 January 2084. Considering the 60 years as a residual term we estimated the premium to the landlord to extend the lease to be within £25,700 and £29,600 plus costs.