Oldham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Oldham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Oldham you must see if your lease has between 70 and ninety years left. There are compelling reasons why a Oldham flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is actioned without delay
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Oldham 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.
Ollie was the the leasehold proprietor of a 2 bedroom flat in Oldham on the market with a lease of a few days over 59 years left. Ollie informally contacted his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Ollie to exercise his statutory right. Ollie procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
In 2009 we were approached by Mr and Mrs. R Khan who, having took over the lease of a first floor apartment in Oldham in August 1996. We are asked if we could estimate the price could be to extend the lease by an additional years. Comparable flats in Oldham with a long lease were worth £280,000. The mid-range amount of ground rent was £45 collected annually. The lease termination date was in 2097. Given that there were 71 years remaining we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including professional charges.
Mr and Mrs. J Parker completed a purpose-built apartment in Oldham in June 2009. The question was if we could estimate the price could be for a ninety year lease extension. Similar properties in Oldham with a long lease were worth £225,800. The average amount of ground rent was £60 collected annually. The lease terminated in 2086. Given that there were 60 years unexpired we approximated the premium to the landlord to extend the lease to be between £25,700 and £29,600 exclusive of professional charges.