Unfortunately that a Otford residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Otford property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Otford will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Using our service gives you enhanced control over the value of your Otford leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Eliot, started to get near to the 80-year mark with the lease on his one bedroom apartment in Otford. Having purchased his flat two decades ago, the unexpired term was of no importance. Thankfully, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Eliot was able to extend his lease just in the nick of time last January. Eliot and the freeholder subsequently settled on the final figure of £5,500 . If the lease had fallen lower than eighty years, the amount would have become more exhorbitant by at least £1,125.
Mr Lucas Scott bought a basement apartment in Otford in March 2001. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparable residencies in Otford with an extended lease were valued about £200,800. The average amount of ground rent was £65 invoiced monthly. The lease ran out in 2085. Considering the 60 years left we approximated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 not including professional charges.
In 2014 we were contacted by Mr Samuel Rose who, having was assigned a lease of a first floor flat in Otford in January 1995. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Comparative homes in Otford with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 collected monthly. The lease finished in 2096. Given that there were 71 years remaining we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.