The market value of a leasehold property in Tilbury depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is preferable to start the lease extension process when a lease still has 82 years unexpired so that formalities can be addressed in advance of the 80 year mark. Leasehold Reform legislation enables Tilbury qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 Tilbury leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jude was the the leasehold owner of a studio apartment in Tilbury being sold with a lease of a few days over 59 years outstanding. Jude informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Jude to exercise his statutory right. Jude procured expert legal guidance and secured an acceptable deal without going to tribunal and readily saleable.
Dr Michael Reed bought a one bedroom flat in Tilbury in January 2011. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Identical flats in Tilbury with an extended lease were in the region of £248,000. The mid-range ground rent payable was £65 collected monthly. The lease came to a finish on 14 April 2088. Given that there were 63 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 exclusive of professional charges.
Last Autumn we were e-mailed by Mr and Mrs. T López , who completed a first floor apartment in Tilbury in July 2007. The question was if we could estimate the price would likely be for a 90 year lease extension. Similar flats in Tilbury with 100 year plus lease were valued about £181,600. The mid-range amount of ground rent was £55 collected per annum. The lease finished in 2077. Having 52 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 not including professional charges.