The re-sale value of a leasehold property in Osterley depends on how long the lease has remaining. If it is close to or less than eighty years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension prior to buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that formalities can be finalised prior to the eighty year threshold. Leasehold Reform legislation enables Osterley qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Osterley with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Osterley 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 conveyancer we work with provide it.
In recent months Muhammad, came critically close to the 80-year threshold with the lease on his one bedroom flat in Osterley. In buying his property twenty years previously, the lease term was of no bearing. As luck would have it, he became aware that he would imminently be paying an escalated premium for a lease extension. Muhammad arranged for a lease extension just in the nick of time last June. Muhammad and the freeholder via the managing agents in the end agreed on the final figure of £6,000 . If the lease had fallen below 80 years, the premium would have escalated by at least £950.
Ms W Ali moved into a studio flat in Osterley in July 2008. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative premises in Osterley with an extended lease were worth £218,000. The average ground rent payable was £45 invoiced every twelve months. The lease lapsed in 2089. Taking into account 63 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 not including costs.
An example of a Lease Extension matter before the tribunal 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 related to 1 flat. The number of years remaining on the existing lease(s) was 60.45 years.