Erith leases on residential properties are gradually losing value. if your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for a lease extension to be in place before the term of the current lease falls under 80 years - otherwise a higher premium will be due. Flat owners in Erith will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to confirm your eligibility. In certain situations you may not qualify. There are also strict deadlines and procedures to comply with once the process has started so it’s sensible to be guided by a conveyancer during the process.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Erith 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 lawyer we work with provide it.
Last Christmas Jonathan, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Erith. In buying his flat two decades ago, the lease term was of no bearing. As luck would have it, he realised he needed to take steps soon on a lease extension. Jonathan extended the lease just under the wire last April. Jonathan and the landlord subsequently agreed on the final figure of £6,000 . If he not met the deadline, the figure would have increased by at least £1,100.
Mr and Mrs. O Díaz was assigned a lease of a basement flat in Erith in June 2004. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Erith with an extended lease were valued about £250,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease elapsed in 2095. Having 69 years remaining we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.
An example of a Lease Extension decision for a Erith property 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.