Unfortunately that a Theale residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Theale property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Theale will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Theale with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Theale 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 conveyancer we work with provide it.
Half a year ago Daniel, started to get near to the 80-year threshold with the lease on his garden apartment in Theale. Having bought his home two decades ago, the length of the lease was of no concern. Luckily, he realised he would soon be paying an escalated premium for a lease extension. Daniel extended the lease just under the wire last July. Daniel and the freeholder via the management company subsequently settled on the final figure of £6,000 . If the lease had slipped to less than 80 years, the amount would have gone up by at least £925.
In 2014 we were phoned by Mr and Mrs. A Carter who, having completed a newly refurbished flat in Theale in November 2003. We are asked if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparative properties in Theale with an extended lease were valued around £255,000. The average ground rent payable was £50 collected per annum. The lease expired on 12 June 2096. Given that there were 70 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £10,500 and £12,000 exclusive of fees.
Mr V Edwards owned a one bedroom apartment in Theale in October 2006. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Comparable premises in Theale with a long lease were worth £246,800. The mid-range ground rent payable was £60 billed quarterly. The lease concluded in 2076. Having 50 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 exclusive of fees.