Headington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Headington residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Headington you would be well advised to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Headington with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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; |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Yorkshire Building Society | 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. |
Retaining our service will provide you better control over the value of your Headington leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Connor was the the leasehold proprietor of a high value apartment in Headington on the market with a lease of a little over sixty years remaining. Connor informally spoke with his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Connor to exercise his statutory right. Connor obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2009 we were e-mailed by Ms D Petit who, having was assigned a lease of a ground floor flat in Headington in September 2005. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Comparative residencies in Headington with an extended lease were worth £250,000. The mid-range ground rent payable was £50 billed yearly. The lease finished on 3 May 2095. Having 69 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.
Dr B Norbert completed a recently refurbished apartment in Headington in April 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Headington with an extended lease were in the region of £285,000. The average ground rent payable was £55 invoiced per annum. The lease expiry date was in 2106. Having 80 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.