The market value of Thames View leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the remaining term is less than 80 years
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Yorkshire 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. |
Retaining our service will provide you increased control over the value of your Thames View leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Stanley, started to get close to the eighty-year mark with the lease on his leasehold flat in Thames View. In buying his home 19 years previously, the lease term was of no interest. by good luck, he noticed he would imminently be paying an escalated premium for a lease extension. Stanley was able to extend his lease at the eleventh hour in April. Stanley and the landlord ultimately agreed on sum of £5,000 . If the lease had dipped below eighty years, the sum would have become more costly by at least £1,125.
In 2010 we were approached by Ms K Morgan who, having owned a first floor flat in Thames View in July 1999. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative flats in Thames View with a long lease were in the region of £275,000. The mid-range ground rent payable was £45 billed per annum. The lease ran out in 2094. Considering the 69 years left we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including legals.
An example of a Lease Extension case for a Thames View residence is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case was in relation to 1 flat. The unexpired term was 61.36 years.