It’s a harsh truth that a Osterley 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 early years due to the reduction being disguised by increases in the Osterley property market.Where your lease has approximately 90 years left, you need to start thinking about 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 dips lower than 80 years - otherwise a higher amount will be payable. Most leasehold owners in Osterley will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold properties in Osterley with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service gives you increased control over the value of your Osterley leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of unsuccessful negotiations with the landlord of her first floor flat in Osterley, Georgia initiated the lease extension process just as her lease was approaching the critical 80-year threshold. The transaction completed in September 2007. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were e-mailed by Mrs A Bell who, having bought a purpose-built flat in Osterley in August 1996. The question was if we could approximate the price could be for a 90 year lease extension. Identical flats in Osterley with a long lease were worth £246,800. The mid-range ground rent payable was £60 billed every twelve months. The lease ended on 3 July 2075. Given that there were 50 years outstanding we estimated the premium to the landlord for the lease extension to be within £44,700 and £51,600 plus professional charges.
An example of a Lease Extension decision for a Osterley property is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case was in relation to 1 flat. The unexpired lease term was 60.45 years.