Erith leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Erith residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Erith you must investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Erith leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is put in place without delay
Leasehold properties in Erith with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
| 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 obtain guidance from a lawyer and valuer with experience in this area.
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 in-depth market knowledge dealing with 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 Finn, started to get near to the eighty-year threshold with the lease on his basement apartment in Erith. Having bought his property twenty years ago, the lease term was of minimal significance. As luck would have it, he realised he would imminently be paying an escalated premium for a lease extension. Finn was able to extend his lease at the eleventh hour in April. Finn and the landlord who owned the flat above subsequently agreed on a premium of £5,000 . If the lease had dropped below 80 years, the price would have gone up by a minimum £1,150.
Mr Kyle Murphy purchased a basement apartment in Erith in March 2004. The dilemma was if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable residencies in Erith with an extended lease were in the region of £270,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease terminated on 28 October 2102. Considering the 76 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.
An example of a Lease Extension case for a Erith premises 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 was in relation to 13 flats. The number of years remaining on the existing lease(s) was 76 years.