For those whose Thornaby flat is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
Leasehold premises in Thornaby with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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; |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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. |
Irrespective of whether you are a tenant or a landlord in Thornaby,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Thornaby valuers.
Edward owned a high value flat in Thornaby on the market with a lease of a little over sixty years outstanding. Edward on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Edward to invoke his statutory right. Edward procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the flat.
Last month we were contacted by Ms Francesca Fournier , who took over the lease of a one bedroom apartment in Thornaby in April 2004. The dilemma was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Comparable premises in Thornaby with an extended lease were valued around £245,000. The mid-range amount of ground rent was £50 billed monthly. The lease ended on 11 January 2094. Given that there were 68 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.
Last September we were contacted by Ms Rachael David , who bought a garden apartment in Thornaby in June 2010. The question was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Similar flats in Thornaby with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £55 billed quarterly. The lease termination date was in 2105. Taking into account 79 years unexpired we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including costs.