Gospel Oak leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Most owners of residential leasehold property in Gospel Oak enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Gospel Oak you should check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold properties in Gospel Oak with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Gospel Oak 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 conveyancing solicitor we work with provide it.
Half a year ago Samuel, started to get near to the eighty-year mark with the lease on his studio flat in Gospel Oak. In buying his property two decades ago, the lease term was of no significance. by good luck, he noticed he would imminently be paying way over the odds for a lease extension. Samuel arranged for a lease extension just under the wire in April. Samuel and the landlord who owned the flat above eventually agreed on the final figure of £5,000 . If the lease had gone to less than 80 years, the price would have escalated by at least £900.
In 2012 we were e-mailed by Mr and Mrs. P Bennett who, having took over the lease of a basement apartment in Gospel Oak in August 1999. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Similar homes in Gospel Oak with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 billed every twelve months. The lease finished on 22 May 2095. Given that there were 70 years remaining we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Gospel Oak property is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case related to 1 flat. The remaining number of years on the lease was 64.77 years.