For those whose Olney home is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension.
Leasehold residencies in Olney with over 100 years left 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 reversionary interest unless savings on ground rent and estate charges merit 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Using our service will provide you increased control over the value of your Olney leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of protracted discussions with the freeholder of her purpose-built apartment in Olney, Georgia initiated the lease extension process just as the lease was coming close to the all-important 80-year mark. The transaction was concluded in April 2014. The landlord’s fees were negotiated to a tad over 600 pounds.
In 2009 we were approached by Mr and Mrs. T Norbert who, having owned a purpose-built flat in Olney in February 2004. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable residencies in Olney with 100 year plus lease were worth £264,000. The mid-range amount of ground rent was £60 billed monthly. The lease expiry date was in 2078. Having 53 years outstanding we calculated the premium to the freeholder for the lease extension to be within £37,100 and £42,800 not including professional charges.
In 2010 we were called by Mr Alexander Bailey who, having owned a basement apartment in Olney in October 1995. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Comparable homes in Olney with an extended lease were valued about £220,400. The mid-range ground rent payable was £45 collected monthly. The lease lapsed in 2089. Considering the 64 years left we calculated the compensation to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of costs.