The market value of Summertown and Botley 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 increase substantially once the remaining term is below than 80 years
Leasehold properties in Summertown and Botley with more than 100 years outstanding 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate 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 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Summertown and Botley 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 Ryan, came perilously near to the eighty-year threshold with the lease on his garden flat in Summertown and Botley. In buying his property two decades ago, the length of the lease was of little concern. Luckily, he realised he would imminently be paying an escalated premium for a lease extension. Ryan arranged for a lease extension just ahead of time last June. Ryan and the freeholder via the managing agents ultimately settled on sum of £5,500 . If he not met the deadline, the price would have increased by a minimum £1,000.
Last Winter we were phoned by Mrs H Hill , who bought a purpose-built flat in Summertown and Botley in July 2003. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Comparative residencies in Summertown and Botley with 100 year plus lease were valued about £218,000. The average ground rent payable was £45 collected per annum. The lease terminated in 2088. Given that there were 63 years outstanding we estimated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 exclusive of costs.
Mrs Harriet Thompson bought a one bedroom flat in Summertown and Botley in January 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by 90 years. Comparable flats in Summertown and Botley with 100 year plus lease were in the region of £265,000. The mid-range ground rent payable was £55 billed monthly. The lease came to a finish on 27 September 2099. Considering the 74 years remaining we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.