Headington leases on domestic properties are gradually losing value. Where your lease has approximately 90 years left, you should start considering the need for a lease extension. Eighty years is a significant number: when the unexpired term of a lease drops below this level then you start incurring an additional element called marriage value. Leasehold owners in Headington will usually qualify for a lease extension; however a solicitor will confirm your eligibility. In certain circumstances you may not qualify. There are also strict timetables and steps to comply with once the process is initiated so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Headington with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Headington can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Headington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of eight months of protracted discussions with the landlord of her purpose-built apartment in Headington, Rhiannon commenced the lease extension process just as the lease was approaching the crucial eighty-year mark. The transaction was concluded in July 2008. The freeholder’s fees were kept to an absolute minimum.
Last month we were phoned by Mrs Megan Stewart , who purchased a one bedroom apartment in Headington in March 1998. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative homes in Headington with 100 year plus lease were valued around £285,000. The average amount of ground rent was £55 invoiced yearly. The lease lapsed on 4 September 2104. Having 79 years remaining we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of costs.
In 2009 we were approached by Mr G Morris who, having took over the lease of a ground floor apartment in Headington in April 2012. We are asked if we could estimate the premium could be to extend the lease by 90 years. Identical residencies in Headington with a long lease were in the region of £193,400. The mid-range amount of ground rent was £65 invoiced per annum. The lease ended in 2084. Taking into account 59 years outstanding we estimated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of expenses.