The market value of a leasehold property in Thames View depends on how many years the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension ahead of purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that formalities can be concluded in advance of the eighty year cut off point. Leasehold Reform legislation entitles Thames View qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a supplemental term of 90 years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Thames View with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| 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. |
The conveyancing solicitors that we work with handle Thames View 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.
Subsequent to unsuccessful correspondence with the landlord of her studio apartment in Thames View, Yasmin commenced the lease extension process as the eighty year deadline was rapidly nearing. The transaction was concluded in January 2009. The landlord’s costs were restricted to under 700 pounds.
Ms Ashleigh Bennett took over the lease of a studio apartment in Thames View in November 2010. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Identical premises in Thames View with a long lease were worth £198,800. The average ground rent payable was £55 billed quarterly. The lease came to a finish in 2080. Given that there were 55 years remaining we approximated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 plus costs.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired term as at the valuation date was 61.36 years.