Thornton 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 gets more expensive. Legislation has been in place for sometime now allowing qualifying Thornton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Thornton you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
Lease extensions in Thornton can be a difficult process. We recommend you obtain professional help from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Thornton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Cameron, came dangerously close to the eighty-year threshold with the lease on his first floor flat in Thornton. In buying his flat 19 years previously, the length of the lease was of no concern. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Cameron was able to extend his lease just ahead of time last March. Cameron and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If he failed to meet the deadline, the sum would have become more costly by a minimum £1,150.
Last month we were approach by Mrs T Edwards , who acquired a studio apartment in Thornton in June 1995. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative homes in Thornton with 100 year plus lease were in the region of £250,400. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 20 October 2090. Having 64 years unexpired we calculated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 plus legals.
Last Winter we were approach by Mr and Mrs. R Reed , who purchased a basement flat in Thornton in January 2012. The question was if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Identical premises in Thornton with an extended lease were valued around £184,000. The mid-range amount of ground rent was £55 collected yearly. The lease came to a finish in 2079. Taking into account 53 years unexpired we approximated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including costs.