With a long leasehold premises in Thames View, you are actually buying an entitlement to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are fewer than 80 years left. Residents in Thames View with a lease approaching 81 years left should seriously consider extending it without delay. Once a lease has below 80 years remaining, under the current legislation the landlord is entitled to calculate and levy a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold premises in Thames View with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Thames View,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Thames View valuers.
In 2014 Michael, came dangerously near to the eighty-year threshold with the lease on his ground floor flat in Thames View. Having purchased his property two decades ago, the unexpired term was of no significance. As luck would have it, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Michael extended the lease at the eleventh hour in July. Michael and the landlord who owned the flat above subsequently settled on a premium of £6,000 . If the lease had dipped lower than 80 years, the amount would have gone up by a minimum £1,150.
Last year we were phoned by Mr and Mrs. M Hall , who was assigned a lease of a ground floor flat in Thames View in February 1997. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparable properties in Thames View with a long lease were worth £208,600. The average amount of ground rent was £60 collected annually. The lease termination date was in 2082. Taking into account 57 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus fees.
An example of a Lease Extension case for a Thames View flat is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case affected 1 flat. The unexpired term was 61.36 years.