The value of Thornaby 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 escalate substantially once the unexpired lease term is below than eighty years
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | 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. |
| 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 |
The lawyers that we work with undertake Thornaby 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 lawyer we work with provide it.
In 2014 Matthew, started to get near to the eighty-year mark with the lease on his studio apartment in Thornaby. Having purchased his home two decades ago, the unexpired term was of little significance. As luck would have it, he became aware that he would imminently be paying way over the odds for Extending the lease. Matthew arranged for a lease extension just in the nick of time in July. Matthew and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If the lease had fallen to less than eighty years, the sum would have escalated by at least £1,075.
Last Christmas we were approach by Mr and Mrs. A Lefèvre , who completed a purpose-built flat in Thornaby in February 2005. We are asked if we could estimate the price could be for a ninety year lease extension. Similar premises in Thornaby with a long lease were valued about £264,000. The mid-range ground rent payable was £60 invoiced per annum. The lease elapsed on 5 November 2079. Having 53 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £37,100 and £42,800 plus legals.
Ms Hannah Bonnet bought a first floor apartment in Thornaby in July 1995. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparable properties in Thornaby with a long lease were in the region of £225,400. The average ground rent payable was £45 collected monthly. The lease expired in 2090. Given that there were 64 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of legals.