For anyone whose Tilehurst flat is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
Leasehold premises in Tilehurst with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Tilehurst,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Tilehurst valuers.
Michael was the the leasehold proprietor of a 2 bedroom apartment in Tilehurst being sold with a lease of a few days over sixty years outstanding. Michael informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Michael to exercise his statutory right. Michael procured expert advice and was able to make a more informed judgement and deal with the matter and sell the flat.
Last Summer we were called by Mr Hunter Thompson , who purchased a one bedroom flat in Tilehurst in September 2005. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Similar premises in Tilehurst with 100 year plus lease were in the region of £173,800. The mid-range amount of ground rent was £60 billed quarterly. The lease expiry date was in 2081. Taking into account 55 years as a residual term we estimated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of legals.
Dr Niamh Allen acquired a studio apartment in Tilehurst in January 2006. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Comparable properties in Tilehurst with a long lease were in the region of £235,200. The mid-range amount of ground rent was £45 collected quarterly. The lease end date was on 22 February 2092. Considering the 66 years unexpired we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.