It’s an underpublicised certainty that a Ouston residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Ouston property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be payable. Most leasehold owners in Ouston 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 deadlines 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 process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Ouston,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ouston valuers.
Jayden owned a 2 bedroom apartment in Ouston being sold with a lease of fraction over sixty years remaining. Jayden informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Jayden to invoke his statutory right. Jayden obtained expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
Last year we were e-mailed by Mr and Mrs. O Nguyen , who completed a studio flat in Ouston in October 2012. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable properties in Ouston with a long lease were in the region of £280,000. The mid-range amount of ground rent was £45 billed quarterly. The lease end date was on 1 August 2095. Taking into account 70 years unexpired we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of legals.
Mr and Mrs. P Petit took over the lease of a garden flat in Ouston in January 2004. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparative residencies in Ouston with an extended lease were in the region of £223,400. The mid-range amount of ground rent was £60 invoiced monthly. The lease terminated on 13 February 2084. Given that there were 59 years left we estimated the premium to the freeholder to extend the lease to be within £27,600 and £31,800 plus fees.