Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Otley. Inevitably, the term of lease remaining shortens as time goes by. This is often ignored and only raises itself as an issue when the flat or house needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Eligible long lease owners in Otley have the right to extend the lease for a further 90 years under legislation. Please give due deliberation before putting off your Otley lease extension. Holding off the cost now only increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a property with more than 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 premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancers that we work with handle Otley 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 conveyancing solicitor we work with provide it.
In 2014 Ali, came perilously close to the 80-year threshold with the lease on his purpose- built apartment in Otley. Having bought his home two decades ago, the lease term was of little interest. Luckily, he realised he would imminently be paying an inflated amount for a lease extension. Ali extended the lease at the eleventh hour last July. Ali and the landlord subsequently agreed on the final figure of £6,000 . If he not met the deadline, the sum would have escalated by a minimum £925.
In 2009 we were phoned by Dr Jennifer Moore who, having owned a one bedroom apartment in Otley in September 1999. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Similar residencies in Otley with an extended lease were valued about £280,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease lapsed in 2094. Having 69 years unexpired we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.
In 2009 we were phoned by Ms U Lefèvre who, having took over the lease of a ground floor apartment in Otley in August 2001. The question was if we could estimate the price could be for a ninety year lease extension. Comparable homes in Otley with an extended lease were worth £216,000. The average ground rent payable was £60 collected monthly. The lease finished in 2083. Given that there were 58 years left we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 not including costs.