As the length of the unexpired term of a Thornbury residential lease decreases so does its value and therefore the value of your property. Where the residual term has, beyond one hundred years to run then this decrease may be fractional however there will become a stage when a lease has less than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner rather than later. Many flat owners in Thornbury will qualify for this right; nevertheless a conveyancer can confirm if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold premises in Thornbury with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancers that we work with handle Thornbury 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 conveyancer we work with provide it.
Last October Samuel, started to get near to the 80-year mark with the lease on his studio flat in Thornbury. Having bought his property twenty years previously, the length of the lease was of no interest. Fortunately, he realised he needed to take action soon on a lease extension. Samuel was able to extend his lease just ahead of time last September. Samuel and the freeholder eventually agreed on sum of £5,000 . If the lease had slid below eighty years, the sum would have escalated by a minimum £950.
In 2013 we were phoned by Mrs F Harris who, having acquired a recently refurbished flat in Thornbury in May 2007. The dilemma was if we could approximate the price could be to extend the lease by 90 years. Comparable flats in Thornbury with 100 year plus lease were valued around £198,800. The average amount of ground rent was £55 collected quarterly. The lease finished on 20 September 2081. Taking into account 55 years remaining we approximated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of fees.
Last Summer we were contacted by Mrs Niamh Vincent , who took over the lease of a one bedroom apartment in Thornbury in August 2005. The question was if we could approximate the premium would likely be for a 90 year lease extension. Similar properties in Thornbury with 100 year plus lease were in the region of £300,000. The mid-range ground rent payable was £50 collected per annum. The lease came to a finish in 2101. Considering the 75 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.