Thornaby leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Thornaby residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Thornaby you should investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure 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 conveyancing solicitor we work with provide it.
Ibrahim owned a high value apartment in Thornaby being marketed with a lease of just over fifty eight years remaining. Ibrahim on an informal basis approached his landlord being a well known Manchester-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 subject to a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Ibrahim to invoke his statutory right. Ibrahim obtained expert legal guidance and secured an acceptable resolution without going to tribunal and readily saleable.
Last Summer we were contacted by Mr and Mrs. B Howard , who acquired a purpose-built apartment in Thornaby in August 2006. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparable properties in Thornaby with an extended lease were in the region of £280,000. The average amount of ground rent was £55 billed monthly. The lease elapsed in 2102. Having 78 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including expenses.
Mrs T Sharif owned a ground floor apartment in Thornaby in September 2000. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Similar properties in Thornaby with 100 year plus lease were in the region of £191,000. The mid-range ground rent payable was £65 billed monthly. The lease finished on 2 May 2082. Taking into account 58 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 exclusive of costs.