Unfortunately that a Tilehurst residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Tilehurst property prices.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher amount will be payable. Most flat owners in Tilehurst will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
Engaging our service gives you better control over the value of your Tilehurst leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Leon, started to get near to the eighty-year mark with the lease on his purpose- built flat in Tilehurst. Having bought his flat 19 years previously, the length of the lease was of minimal bearing. Fortunately, it dawned on him that he would soon be paying way over the odds for a lease extension. Leon arranged for a lease extension just in the nick of time last September. Leon and the landlord who owned the flat above ultimately agreed on sum of £5,500 . If he not met the deadline, the figure would have become more exhorbitant by a minimum £1,025.
Mr and Mrs. M Collins owned a one bedroom flat in Tilehurst in May 2001. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable homes in Tilehurst with 100 year plus lease were valued about £275,000. The mid-range ground rent payable was £55 billed every twelve months. The lease expired in 2103. Considering the 77 years unexpired we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including professional charges.
Mr and Mrs. W Rivera was assigned a lease of a one bedroom apartment in Tilehurst in August 2006. We are asked if we could approximate the price could be for a ninety year lease extension. Similar residencies in Tilehurst with 100 year plus lease were worth £183,600. The average ground rent payable was £65 invoiced yearly. The lease termination date was in 2083. Taking into account 57 years outstanding we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of legals.