Oldham leases on residential properties are gradually losing value. Where your lease has in the region of 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Oldham will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to check your eligibility. In some situations you may not be entitled. There are prescribed deadlines and steps to follow once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Oldham with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle 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.
During the course of the last few months Finn, came seriously close to the eighty-year threshold with the lease on his ground floor flat in Oldham. In buying his home two decades ago, the unexpired term was of little significance. Thankfully, he realised he would soon be paying an escalated premium for a lease extension. Finn arranged for a lease extension at the eleventh hour in January. Finn and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If he not met the deadline, the amount would have increased by at least £975.
In 2012 we were approached by Dr Thomas Howard who, having bought a one bedroom flat in Oldham in June 2007. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Comparable homes in Oldham with a long lease were in the region of £290,000. The average ground rent payable was £45 billed monthly. The lease terminated in 2099. Given that there were 73 years remaining we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
Mr and Mrs. A Taylor owned a basement apartment in Oldham in April 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative flats in Oldham with a long lease were in the region of £243,000. The average amount of ground rent was £65 billed every twelve months. The lease expired on 26 October 2089. Considering the 63 years unexpired we approximated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of fees.