The market value of Otley leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is below than 80 years
Leasehold premises in Otley with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Retaining our service gives you increased control over the value of your Otley leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Stanley was the the leasehold proprietor of a studio apartment in Otley on the market with a lease of a little over 59 years remaining. Stanley informally approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Stanley to invoke his statutory right. Stanley procured expert advice and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Autumn we were e-mailed by Mr and Mrs. A Morris , who moved into a purpose-built apartment in Otley in September 2001. We are asked if we could approximate the price would be for a 90 year lease extension. Similar flats in Otley with 100 year plus lease were worth £191,400. The mid-range ground rent payable was £55 billed per annum. The lease ran out on 21 September 2080. Having 54 years remaining we calculated the premium to the landlord for the lease extension to be within £27,600 and £31,800 not including legals.
Last Winter we were phoned by Mrs T Bertrand , who moved into a one bedroom apartment in Otley in February 2000. The question was if we could approximate the price could be for a 90 year extension to my lease. Identical homes in Otley with a long lease were worth £290,000. The average ground rent payable was £45 collected every twelve months. The lease came to a finish on 16 October 2100. Having 74 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.