The value of Burnt Oak leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Burnt Oak,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Burnt Oak valuers.
Last October Ryan, came critically close to the 80-year mark with the lease on his studio flat in Burnt Oak. Having purchased his property twenty years ago, the length of the lease was of minimal concern. Luckily, he became aware that he would imminently be paying an inflated amount for a lease extension. Ryan was able to extend his lease at the eleventh hour in January. Ryan and the freeholder via the management company ultimately agreed on sum of £5,000 . If he failed to meet the deadline, the figure would have become more exhorbitant by a minimum £1,050.
Dr Finn Phillips bought a garden flat in Burnt Oak in September 2009. The question was if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Similar residencies in Burnt Oak with 100 year plus lease were worth £205,000. The average ground rent payable was £50 billed quarterly. The lease terminated on 28 September 2105. Considering the 79 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Burnt Oak property is 20 Orchard Court Stonegrove in June 2009. The tribunal decided that a premium of £11,040 should be payable for the new lease This case was in relation to 1 flat. The unexpired term as at the valuation date was 71.55 years.