Oakhill leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Oakhill tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Oakhill you would be well advised to see if your lease has between 70 and ninety years remaining. There are good reasons why a Oakhill flat owner with a lease having around eighty years left should take action to ensure that a lease extension is effected without delay
It is generally accepted that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Oakhill,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Oakhill valuers.
In recent months Michael, started to get near to the 80-year threshold with the lease on his ground floor apartment in Oakhill. In buying his home two decades ago, the length of the lease was of little relevance. Fortunately, he realised he needed to take action soon on Extending the lease. Michael extended the lease at the eleventh hour last September. Michael and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If the lease had dipped below eighty years, the sum would have increased by a minimum £900.
Last year we were e-mailed by Mrs Paige Brooks , who acquired a first floor flat in Oakhill in September 2007. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Similar premises in Oakhill with 100 year plus lease were worth £300,000. The mid-range ground rent payable was £50 billed annually. The lease ended on 14 May 2100. Given that there were 75 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of fees.
An example of a Freehold Enfranchisement decision for a Oakhill property is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The unexpired lease term was 69.26 years.