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 seen longer and shorter terms in Oakwood. Clearly, the length of lease left reduces as time goes by. This is often ignored and only raises itself as an issue when the flat or house has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Oakwood have the right to extend the lease for an additional 90 years under statute. Do give careful attention before delaying your Oakwood lease extension. Putting off that expense now only increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | 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. |
Regardless of whether you are a tenant or a landlord in Oakwood,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Oakwood valuers.
Owen owned a high value apartment in Oakwood on the market with a lease of just over 72 years unexpired. Owen informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Owen to exercise his statutory right. Owen obtained expert advice and was able to make an informed decision and deal with the matter and readily saleable.
Last month we were e-mailed by Mr and Mrs. L Bertrand , who purchased a studio flat in Oakwood in July 1998. The question was if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparative residencies in Oakwood with 100 year plus lease were worth £210,000. The mid-range ground rent payable was £50 collected quarterly. The lease lapsed in 2105. Considering the 80 years remaining we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.
Mrs F François owned a recently refurbished flat in Oakwood in August 1995. The dilemma was if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Comparable homes in Oakwood with an extended lease were worth £275,000. The mid-range amount of ground rent was £45 invoiced monthly. The lease came to a finish in 2094. Having 69 years remaining we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.