It’s a harsh certainty that a Eltham residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction 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. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be due. The majority of flat owners in Eltham will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Eltham 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 conveyancer we work with provide it.
Half a year ago Zachary, started to get near to the 80-year mark with the lease on his basement apartment in Eltham. In buying his property 19 years ago, the lease term was of no interest. Thankfully, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Zachary was able to extend his lease just ahead of time last September. Zachary and the landlord subsequently settled on an amount of £6,000 . If the lease had slipped below 80 years, the price would have become more exhorbitant by at least £1,075.
Last month we were approach by Mr O Morel , who acquired a one bedroom apartment in Eltham in January 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Eltham with a long lease were valued about £206,200. The mid-range amount of ground rent was £60 collected annually. The lease ended in 2082. Considering the 56 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 not including fees.
An example of a Lease Extension case for a Eltham property 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 related to 1 flat.