Thornton Heath leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Thornton Heath enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Thornton Heath you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for 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 property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Thornton Heath leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Gabriel was the the leasehold owner of a conversion flat in Thornton Heath on the market with a lease of a few days over 59 years remaining. Gabriel on an informal basis approached his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Gabriel to invoke his statutory right. Gabriel obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Autumn we were e-mailed by Mrs Lauren Bennett , who took over the lease of a first floor flat in Thornton Heath in January 2012. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparative residencies in Thornton Heath with 100 year plus lease were worth £206,200. The average ground rent payable was £55 collected monthly. The lease came to a finish in 2082. Given that there were 56 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 not including expenses.
An example of a Lease Extension matter before the tribunal 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 number of years remaining on the existing lease(s) was 69.46 years.