Why you should start your Oakwood lease extension
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<h3> Top reasons for lease extension now:
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<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/oakwood">Oakwood</a> lease depreciates with the years remaining on the lease.
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<p> It’s a harsh truth that a Oakwood residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Oakwood property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be due. Most leasehold owners in Oakwood will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
<h4>An extended lease is almost the same value as a freehold</h4>
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Leasehold premises in Oakwood with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it. <h4>Lending institutions may not issue a mortgage on a short lease</h4> Many mortgage companies require a lengthy amount of time left on any leasehold property before they will contemplate lending on it. Even if you don't need a mortgage, you should keep in mind that it is reasonable to assume that someone intending to acquire your property in the future might well do, so where they are not able to get a mortgage, then the value of your property could be adversely impacted. In the last decade many mortgage lenders have increased the required minimum lease length that they are willing to grant a mortgage on <p>
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<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Leeds Building Society</td>
<td> 85 years remaining from the start of the mortgage.
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<td>Lloyds TSB Scotland</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>National Westminster Bank</td>
<td> Mortgage term plus 30 years.<br /><br />For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage.
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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What makes us experts in Oakwood lease extensions?
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<p> Regardless of whether you are a tenant or a freeholder in Oakwood,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 in-depth market knowledge and the close ties they enjoy with Oakwood valuers.
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Oakwood Lease Extension Case Summaries:
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<h5> Felix, Oakwood, Leeds</h5>
<p> Two years ago Felix, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Oakwood. Having purchased his flat two decades ago, the lease term was of no relevance. by good luck, he noticed he needed to take steps soon on Extending the lease. Felix extended the lease just ahead of time in January. Felix and the freeholder eventually settled on sum of £5,500 . If he had missed the deadline, the amount would have become more exhorbitant by a minimum £1,000.
<h5>Oakwood case:</h5>
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In 2009 we were e-mailed by Mr E García who, having owned a purpose-built apartment in Oakwood in September 1996. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Similar properties in Oakwood with an extended lease were worth £205,000. The average ground rent payable was £50 collected per annum. The lease came to a finish on 11 February 2105. Having 79 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including expenses.
<h5>Oakwood case:</h5>
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In 2014 we were phoned by Mr V Gunderson who, having took over the lease of a garden apartment in Oakwood in October 2010. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Similar properties in Oakwood with 100 year plus lease were worth £275,000. The average ground rent payable was £65 billed yearly. The lease expired in 2094. Taking into account 68 years left we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus professional charges.
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