It’s a harsh truth that a Thornton Heath residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Thornton Heath property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Thornton Heath will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service gives you better control over the value of your Thornton Heath leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Harry, started to get close to the eighty-year mark with the lease on his one bedroom flat in Thornton Heath. In buying his home two decades ago, the lease term was of minimal relevance. Luckily, it dawned on him that he needed to take action soon on a lease extension. Harry extended the lease at the eleventh hour in August. Harry and the landlord who owned the flat above eventually settled on a premium of £5,500 . If he failed to meet the deadline, the figure would have increased by a minimum £1,100.
Last Summer we were phoned by Mr and Mrs. M Davies , who bought a studio flat in Thornton Heath in July 2006. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Similar flats in Thornton Heath with 100 year plus lease were worth £198,800. The average amount of ground rent was £55 invoiced quarterly. The lease came to a finish on 8 January 2081. Given that there were 55 years remaining we estimated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 plus legals.
An example of a Lease Extension decision for a Thornton Heath flat is Ground Floor Flat 14 Lodge Road in October 2013. the tribunal held that the price payable for the acquisition of the extended lease of the property should be £12,590 .00 This case affected 1 flat. The unexpired term as at the valuation date was 69.46 years.