It’s a harsh truth that a Eltham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Eltham property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining dips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Eltham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Eltham with over 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 home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Eltham leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the freeholder of her first floor flat in Eltham, Freya initiated the lease extension process just as the lease was nearing the all-important eighty-year threshold. The lease extension was finalised in June 2013. The freeholder’s charges were kept to an absolute minimum.
Last Christmas we were phoned by Mr and Mrs. R Bell , who moved into a one bedroom flat in Eltham in July 2005. The dilemma was if we could approximate the price would be for a ninety year lease extension. Similar residencies in Eltham with a long lease were in the region of £191,400. The average ground rent payable was £55 billed quarterly. The lease concluded on 20 April 2080. Taking into account 54 years as a residual term we approximated the premium to the landlord for the lease extension to be between £34,200 and £39,600 plus expenses.
An example of a Lease Extension matter before the tribunal for a Eltham residence is 103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended lease should be £34,500 according to the expert witness valuation calculation This case was in relation to 1 flat.