The market value of a leasehold property in Olney is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be addressed well before the 80 year cut off point. Statute enables Olney qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Olney with more than one hundred years outstanding on the lease are sometimes regarded as a ‘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 buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with procure Olney 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 conveyancer we work with provide it.
In 2014 Freddie, came critically near to the 80-year mark with the lease on his basement flat in Olney. Having purchased his flat 18 years previously, the lease term was of minimal concern. by good luck, he recognised he would imminently be paying an escalated premium for Extending the lease. Freddie extended the lease at the eleventh hour last July. Freddie and the freeholder ultimately agreed on a premium of £6,000 . If the lease had dipped lower than 80 years, the premium would have gone up by a minimum £975.
In 2009 we were contacted by Mr Felix Bennett who, having was assigned a lease of a purpose-built apartment in Olney in January 1999. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative premises in Olney with a long lease were valued around £280,000. The mid-range amount of ground rent was £55 billed yearly. The lease concluded in 2103. Having 77 years remaining we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus expenses.
Last month we were approach by Dr W Taylor , who owned a garden flat in Olney in October 1995. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparable flats in Olney with an extended lease were valued about £183,600. The average ground rent payable was £65 invoiced per annum. The lease terminated in 2083. Having 57 years remaining we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including expenses.