Thetford leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Thetford residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Thetford you should see if your lease has between 70 and 90 years remaining. There are good reasons why a Thetford leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is put in place without delay
Leasehold residencies in Thetford with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Thetford,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Thetford valuers.
Last October Jude, came very close to the eighty-year mark with the lease on his purpose- built apartment in Thetford. In buying his flat two decades ago, the lease term was of little importance. Thankfully, it dawned on him that he needed to take steps soon on a lease extension. Jude extended the lease at the eleventh hour in August. Jude and the freeholder via the management company in the end agreed on sum of £5,000 . If the lease had fallen lower than eighty years, the amount would have increased by at least £900.
Last Christmas we were e-mailed by Dr H Wright , who took over the lease of a garden apartment in Thetford in September 2009. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparative properties in Thetford with 100 year plus lease were valued about £208,200. The average amount of ground rent was £65 billed quarterly. The lease came to a finish in 2087. Considering the 61 years outstanding we calculated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 not including expenses.
Last Spring we were approach by Mrs R Collins , who took over the lease of a garden flat in Thetford in June 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Comparable properties in Thetford with a long lease were in the region of £260,000. The average amount of ground rent was £50 billed monthly. The lease expiry date was in 2098. Taking into account 72 years left we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.