It’s a harsh truth that a Plumstead residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Plumstead property market.Where your lease has approximately ninety years left, 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 lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Plumstead will be able to extend under the legislation; however a conveyancer will 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 generally considered that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Plumstead,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Plumstead valuers.
Jasper was the the leasehold owner of a high value flat in Plumstead on the market with a lease of a little over 59 years left. Jasper on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jasper to exercise his statutory right. Jasper obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. F Nelson owned a newly refurbished apartment in Plumstead in November 1996. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparable properties in Plumstead with a long lease were in the region of £168,800. The mid-range amount of ground rent was £60 invoiced quarterly. The lease terminated in 2079. Taking into account 55 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.
An example of a Lease Extension decision for a Plumstead 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.