For anyone whose Erith flat is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as 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. |
| 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; |
| 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. |
| 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. |
Lease extensions in Erith can be a difficult process. We recommend you secure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Erith lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Felix, came very close to the eighty-year threshold with the lease on his basement flat in Erith. In buying his home two decades ago, the unexpired term was of minimal bearing. Thankfully, he recognised he needed to take action soon on Extending the lease. Felix was able to extend his lease just ahead of time last April. Felix and the freeholder via the management company subsequently agreed on an amount of £5,000 . If the lease had descended lower than eighty years, the figure would have escalated by a minimum £1,150.
Last year we were contacted by Dr Y Cox , who acquired a newly refurbished flat in Erith in May 1999. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Similar residencies in Erith with an extended lease were valued about £275,000. The average ground rent payable was £55 collected per annum. The lease ran out on 17 February 2103. Given that there were 77 years remaining we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of fees.
An example of a Lease Extension case for a Erith residence is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case affected 13 flats. The unexpired term as at the valuation date was 76 years.