Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Headington. Clearly, the length of lease remaining reduces as time goes by. This may pass by relatively unnoticed when the property has to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible long lease owners in Headington have the legal entitlement to extend the lease for an additional ninety years in accordance with legislation. Do give careful deliberation before putting off your Headington lease extension. Holding off the cost now only increases the price you will ultimately have to pay for a lease extension
Leasehold residencies in Headington with over 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 home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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. |
| 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; |
| Chelsea 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Headington,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 experience and the close ties they enjoy with Headington valuers.
Last year Liam, came dangerously close to the 80-year mark with the lease on his studio apartment in Headington. Having purchased his property 19 years ago, the lease term was of no importance. by good luck, he became aware that he needed to take steps soon on Extending the lease. Liam was able to extend his lease just under the wire last August. Liam and the landlord who owned the flat above subsequently agreed on a premium of £5,000 . If the lease had dropped below eighty years, the sum would have gone up by at least £1,100.
Mr and Mrs. B Walker bought a one bedroom apartment in Headington in February 2006. The dilemma was if we could approximate the price would be to extend the lease by 90 years. Comparable homes in Headington with an extended lease were valued around £242,600. The mid-range ground rent payable was £45 collected monthly. The lease expiry date was on 6 November 2092. Considering the 67 years left we estimated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 plus costs.
In 2014 we were e-mailed by Dr L González who, having bought a first floor apartment in Headington in March 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Similar properties in Headington with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 collected annually. The lease came to a finish on 23 September 2103. Having 78 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus professional charges.