As the the remaining lease term of a Oldham residential lease lessens so does its value and therefore the value of your property. If the residual term has, over 125 years to run then this decrease may be of little impact that being said there will become a stage when a lease has fewer than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main reason why you should consider extending sooner rather than later. Many flat owners in Oldham will qualify for this right; that being said a conveyancer will be able to confirm if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | 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. |
Engaging our service will provide you enhanced control over the value of your Oldham leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Noah owned a conversion apartment in Oldham on the market with a lease of fraction over 61 years unexpired. Noah informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Noah to invoke his statutory right. Noah obtained expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Last year we were phoned by Mr and Mrs. T Bennett , who purchased a basement flat in Oldham in October 1995. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Identical premises in Oldham with 100 year plus lease were valued about £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease elapsed in 2078. Having 53 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of costs.
In 2012 we were contacted by Mr and Mrs. N Laurent who, having owned a garden apartment in Oldham in September 1999. The question was if we could estimate the premium would be for a ninety year extension to my lease. Comparable properties in Oldham with a long lease were valued around £290,000. The mid-range ground rent payable was £45 collected monthly. The lease terminated in 2098. Taking into account 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.