The basic rule is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Tilehurst have the right to extend the lease for an additional 90 years under legislation. Please think carefully before delaying your Tilehurst lease extension. Putting off the costs now simply increases the premium you will ultimately be required to pay for a lease extension.
Leasehold premises in Tilehurst with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with undertake Tilehurst lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
In recent months Luke, started to get near to the 80-year mark with the lease on his purpose- built apartment in Tilehurst. In buying his property two decades ago, the length of the lease was of little concern. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Luke was able to extend his lease just ahead of time last July. Luke and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If the lease had slipped below 80 years, the premium would have become more costly by a minimum £1,100.
Last Autumn we were called by Mr and Mrs. K Rodríguez , who purchased a ground floor flat in Tilehurst in February 2010. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Comparative residencies in Tilehurst with a long lease were worth £200,800. The average amount of ground rent was £65 collected monthly. The lease expiry date was on 5 October 2085. Considering the 60 years unexpired we approximated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 exclusive of costs.
Last Autumn we were called by Dr E Simon , who took over the lease of a one bedroom apartment in Tilehurst in June 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable premises in Tilehurst with an extended lease were in the region of £255,000. The average amount of ground rent was £50 collected every twelve months. The lease concluded in 2096. Taking into account 71 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus expenses.