The re-sale value of a leasehold property in Thornbury depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be concluded ahead of the 80 year cut off point. Leasehold Reform legislation enables Thornbury qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Thornbury 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 lawyer we work with provide it.
In recent months Teddy, came seriously close to the eighty-year threshold with the lease on his ground floor apartment in Thornbury. Having bought his home two decades ago, the lease term was of minimal concern. Thankfully, he recognised he needed to take action soon on a lease extension. Teddy arranged for a lease extension just under the wire last August. Teddy and the landlord subsequently settled on sum of £5,000 . If he had missed the deadline, the sum would have become more costly by a minimum £1,150.
Mrs Kate Gunderson owned a studio flat in Thornbury in November 1999. The question was if we could approximate the price would be to extend the lease by a further 90 years. Comparative flats in Thornbury with an extended lease were in the region of £295,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease finished on 26 February 2100. Taking into account 74 years as a residual term we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Mr S Davies took over the lease of a studio flat in Thornbury in April 2007. The question was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative premises in Thornbury with 100 year plus lease were worth £243,000. The average amount of ground rent was £65 billed monthly. The lease ended in 2089. Considering the 63 years left we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 plus costs.