It’s a harsh truth that a Thornaby residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Thornaby property prices.Once your lease gets to 85ish years, 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 eighty years - otherwise a higher premium will be due. Most leasehold owners in Thornaby will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 handle Thornaby 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.
James owned a high value flat in Thornaby on the market with a lease of just over sixty years left. James informally spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were James to exercise his statutory right. James obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Mrs W Cooper completed a newly refurbished flat in Thornaby in October 2006. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar properties in Thornaby with a long lease were valued around £246,800. The mid-range amount of ground rent was £60 invoiced monthly. The lease elapsed on 20 April 2075. Taking into account 50 years remaining we estimated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of legals.
Last Christmas we were e-mailed by Ms W Martínez , who owned a one bedroom apartment in Thornaby in May 1996. The dilemma was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparative premises in Thornaby with a long lease were valued about £208,200. The average ground rent payable was £65 invoiced per annum. The lease terminated on 2 March 2086. Given that there were 61 years left we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 plus expenses.