The market value of Thurrock leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the remaining term is less than 80 years
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Thurrock,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Thurrock valuers.
Last Spring Lewis, started to get close to the 80-year threshold with the lease on his two bedroom flat in Thurrock. In buying his flat two decades ago, the length of the lease was of minimal relevance. Luckily, it dawned on him that he needed to take steps soon on a lease extension. Lewis arranged for a lease extension just under the wire in March. Lewis and the freeholder via the managing agents subsequently settled on sum of £6,000 . If he failed to meet the deadline, the sum would have escalated by at least £1,050.
In 2011 we were phoned by Dr Ellie Díaz who, having acquired a one bedroom flat in Thurrock in March 1998. The question was if we could approximate the premium could be to prolong the lease by an additional years. Comparable homes in Thurrock with an extended lease were worth £205,000. The average ground rent payable was £50 invoiced monthly. The lease concluded in 2102. Having 78 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus costs.
In 2012 we were called by Mr and Mrs. F Rose who, having moved into a first floor flat in Thurrock in November 1995. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparable properties in Thurrock with 100 year plus lease were worth £267,600. The average amount of ground rent was £65 billed annually. The lease termination date was on 26 June 2091. Taking into account 67 years remaining we estimated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 exclusive of fees.