Oakwood leases on residential deteriorating in value. if your lease has in the region of ninety years left, you should start thinking about a lease extension. If lease term falls under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Oakwood will usually qualify for a lease extension; however it’s a good idea to check with a lawyer to confirm your eligibility. In some circumstances you may not be entitled. There are prescribed deadlines and steps to comply with once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Oakwood with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Oakwood leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Leo owned a 2 bedroom flat in Oakwood on the market with a lease of a few days over 59 years remaining. Leo on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Leo to invoke his statutory right. Leo procured expert advice and secured an acceptable deal without going to tribunal and sell the property.
Last Autumn we were phoned by Dr K King , who took over the lease of a garden apartment in Oakwood in January 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparable premises in Oakwood with an extended lease were in the region of £285,000. The mid-range ground rent payable was £45 billed per annum. The lease end date was in 2096. Taking into account 71 years unexpired we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of costs.
In 2013 we were e-mailed by Dr T Wilson who, having moved into a first floor flat in Oakwood in February 1999. The question was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable flats in Oakwood with a long lease were in the region of £225,800. The average amount of ground rent was £60 invoiced monthly. The lease elapsed on 17 April 2085. Given that there were 60 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 plus legals.