Thornbury leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Thornbury enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Thornbury you would be well advised to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Thornbury with more than 100 years unexpired 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 premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Thornbury,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Thornbury valuers.
After unsuccessful discussions with the landlord of her one bedroom flat in Thornbury, Jordan commenced the lease extension process as the eighty year threshold was fast nearing. The legal work was finalised in August 2014. The freeholder’s costs were restricted to a tad over 600 pounds.
Last year we were e-mailed by Mr J Sánchez , who moved into a ground floor flat in Thornbury in August 2008. We are asked if we could estimate the price could be for a ninety year lease extension. Comparable residencies in Thornbury with a long lease were in the region of £275,000. The average ground rent payable was £45 collected yearly. The lease came to a finish on 11 January 2094. Having 69 years left we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including expenses.
Dr P García was assigned a lease of a basement apartment in Thornbury in July 1995. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Thornbury with 100 year plus lease were valued around £216,000. The average amount of ground rent was £60 collected annually. The lease ran out in 2083. Taking into account 58 years remaining we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus expenses.