For anyone whose Oakham home is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with undertake Oakham 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.
In the wake of eight months of lengthy correspondence with the freeholder of her purpose-built apartment in Oakham, Alice initiated the lease extension process as the eighty year threshold was rapidly approaching. The lease extension was concluded in September 2005. The freeholder’s fees were kept to an absolute minimum.
Last year we were phoned by Mr and Mrs. T Nguyen , who owned a garden flat in Oakham in May 1995. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical flats in Oakham with a long lease were valued about £216,000. The mid-range ground rent payable was £60 billed quarterly. The lease termination date was in 2084. Considering the 58 years left we estimated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of costs.
Ms W Ali moved into a studio apartment in Oakham in March 2010. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable flats in Oakham with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 billed annually. The lease concluded in 2104. Having 78 years remaining we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.