The re-sale value of a leasehold property in Thornhill is impacted by how many years the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the process of extending the lease is when a lease still has 82 years unexpired so that formalities can be concluded prior to the eighty year mark. Current legislation entitles Thornhill qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of ninety years. The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Thornhill with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Thornhill,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Thornhill valuers.
Last October Kyle, came seriously close to the eighty-year threshold with the lease on his garden apartment in Thornhill. Having bought his home two decades ago, the lease term was of minimal relevance. Luckily, he became aware that he needed to take steps soon on a lease extension. Kyle extended the lease just in the nick of time in July. Kyle and the freeholder via the management company in the end settled on a premium of £6,000 . If he had missed the deadline, the amount would have increased by at least £1,125.
In 2012 we were phoned by Mrs Rachael Gómez who, having owned a newly refurbished flat in Thornhill in July 2006. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Thornhill with 100 year plus lease were in the region of £198,800. The mid-range ground rent payable was £55 invoiced yearly. The lease terminated on 3 May 2080. Given that there were 55 years outstanding we estimated the premium to the landlord for the lease extension to be between £33,300 and £38,400 plus expenses.
Last Summer we were e-mailed by Mr and Mrs. J Murphy , who acquired a one bedroom apartment in Thornhill in July 1995. The dilemma was if we could estimate the premium would be to prolong the lease by 90 years. Identical flats in Thornhill with 100 year plus lease were valued around £300,000. The mid-range ground rent payable was £50 collected yearly. The lease lapsed in 2100. Taking into account 75 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.