There is no doubt about it a leasehold property in Thatcham is a wasting asset as a result of the shortening lease. Where the lease has, over 100 years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has less than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. The majority of flat owners in Thatcham will meet the qualifying criteria; however a lawyer should be able to confirm if you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
The conveyancers that we work with undertake Thatcham 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.
Last October Connor, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Thatcham. In buying his home two decades ago, the lease term was of minimal bearing. Fortunately, he realised he would soon be paying an escalated premium for a lease extension. Connor extended the lease just ahead of time last April. Connor and the freeholder via the management company subsequently agreed on a premium of £5,500 . If he not met the deadline, the figure would have become more costly by at least £850.
In 2009 we were approached by Dr M Roberts who, having was assigned a lease of a recently refurbished flat in Thatcham in September 2009. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Identical properties in Thatcham with an extended lease were valued about £280,000. The average amount of ground rent was £45 billed annually. The lease lapsed in 2094. Taking into account 69 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.
In 2009 we were phoned by Dr Georgia Scott who, having was assigned a lease of a studio apartment in Thatcham in May 2001. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative homes in Thatcham with an extended lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed quarterly. The lease finished on 22 May 2083. Considering the 58 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 plus professional charges.