Theale leases on residential deteriorating in value. Where your lease has in the region of 90 years remaining, you should start thinking about a lease extension. An important point to note is that it is financially advisable for your lease extension to be in place before the term of the existing lease falls under 80 years - otherwise a higher premium will be due. Flat owners in Theale will mostly qualify for a lease extension; however a solicitor should be able confirm if you qualify. In certain situations you may not qualify. There are also strict deadlines and formalities to comply with once the process has commenced so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold premises in Theale with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The conveyancers that we work with procure Theale 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.
Nathaniel was the the leasehold proprietor of a 2 bedroom flat in Theale being sold with a lease of just over sixty years remaining. Nathaniel on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Nathaniel to invoke his statutory right. Nathaniel obtained expert advice and secured an acceptable deal without going to tribunal and readily saleable.
Last month we were phoned by Mr and Mrs. M Rose , who acquired a one bedroom apartment in Theale in March 2008. The question was if we could approximate the premium could be to extend the lease by ninety years. Comparable properties in Theale with an extended lease were in the region of £166,400. The average ground rent payable was £60 collected per annum. The lease expiry date was in 2079. Taking into account 54 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 not including fees.
In 2011 we were e-mailed by Dr G Sharif who, having took over the lease of a one bedroom apartment in Theale in September 2005. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Comparative properties in Theale with a long lease were valued about £227,800. The mid-range amount of ground rent was £45 invoiced yearly. The lease terminated in 2090. Having 65 years unexpired we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus legals.