Oval leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Oval enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Oval you really ought to investigate if your lease has between 70 and ninety years left. There are good reasons why a Oval leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is put in place without delay
Leasehold residencies in Oval with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The conveyancing solicitors that we work with procure Oval 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 conveyancer we work with provide it.
Last October Toby, started to get near to the 80-year mark with the lease on his first floor apartment in Oval. Having bought his property 18 years ago, the unexpired term was of minimal concern. Luckily, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Toby arranged for a lease extension at the eleventh hour last July. Toby and the landlord subsequently settled on a premium of £6,000 . If the lease had gone below 80 years, the premium would have become more exhorbitant by at least £975.
Ms L Miller acquired a basement flat in Oval in May 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Comparative flats in Oval with a long lease were worth £233,200. The average ground rent payable was £60 invoiced quarterly. The lease terminated on 12 February 2086. Considering the 61 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 plus legals.
An example of a Lease Extension matter before the tribunal for a Oval premises is Ground Floor Flat 39 Bronsart Road in May 2010. Following a vesting order by West London County Court the Leasehold Valuation Tribunal concluded that the price to be paid for the extended lease of the premises was Thirteen Thousand Two hundred pounds (£13,200) in accordance with the valuation. The extended lease was granted for a term of 90 years from the expiry date of the Lease and at a peppercorn ground rent from the date of the vesting order. This case affected 1 flat. The unexpired term as at the valuation date was 74.77 years.