The market value of a leasehold property in Thornton Heath depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is ideal to start the lease extension process when the lease still has 82 years remaining so that formalities can be concluded in advance of the 80 year threshold. Current legislation enables Thornton Heath qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a notional rent (zero ground rent). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Thornton Heath with over one hundred years unexpired 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 situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Thornton Heath leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Austin owned a conversion apartment in Thornton Heath on the market with a lease of a little over sixty years outstanding. Austin informally contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Austin to invoke his statutory right. Austin obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2009 we were e-mailed by Mr and Mrs. A Vincent who, having was assigned a lease of a one bedroom flat in Thornton Heath in June 2006. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Similar properties in Thornton Heath with a long lease were in the region of £233,200. The mid-range amount of ground rent was £60 billed quarterly. The lease terminated in 2087. Considering the 61 years remaining we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus fees.
An example of a Lease Extension decision for a Thornton Heath residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 69.46 years.