With a residential leasehold property in Tilbury, you are actually buying an entitlement to live in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are less than eighty years left. Anyone in Tilbury with a lease drawing near to 81 years left should seriously think of extending it sooner as opposed to later. When a lease has under eighty years remaining, under the current legislation the freeholder can calculate and charge a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Tilbury,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tilbury valuers.
Last year Arthur, started to get near to the eighty-year threshold with the lease on his one bedroom flat in Tilbury. In buying his property two decades ago, the unexpired term was of no concern. As luck would have it, he recognised he needed to take action soon on a lease extension. Arthur extended the lease at the eleventh hour in May. Arthur and the freeholder in the end settled on sum of £6,000 . If the lease had dropped below 80 years, the price would have escalated by a minimum £925.
In 2010 we were approached by Mr and Mrs. P Torres who, having moved into a purpose-built apartment in Tilbury in March 2007. The question was if we could estimate the price could be for a 90 year extension to my lease. Identical homes in Tilbury with a long lease were valued around £205,000. The mid-range amount of ground rent was £50 billed monthly. The lease expired in 2103. Given that there were 78 years unexpired we approximated the compensation to the landlord to extend the lease to be between £7,600 and £8,800 plus costs.
Dr H Gómez took over the lease of a ground floor flat in Tilbury in November 2004. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparative properties in Tilbury with a long lease were in the region of £267,600. The average amount of ground rent was £65 collected annually. The lease expired in 2092. Having 67 years left we calculated the premium to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of professional charges.