It’s an underpublicised truth that a New Eltham residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the New Eltham property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining drops below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in New Eltham will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold premises in New Eltham with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
|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.|
|HSBC|| All Residential leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset.|
All Buy to Let leasehold properties must have more than 35 years remaining on the lease beyond the term of the mortgage at the outset.
|Nationwide Building Society|| Our minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term.|
Report to the issuing office if the lease term is shorter than that stated on the offer and has less than 100 years remaining. (There is no requirement to report if the lease term is lower than that stated on the offer but still has 100 years or more to run, or if the lease term is longer than that stated on the offer).
NEW BUILD PROPERTIES (includes office conversions)
The following are not acceptable:
- The unexpired lease term is less than 125 years on a new build flat or 250 years on a new build house (does not apply to Shared Ownership)
- Starting ground rent is more than 0.1% of the property value
The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed.
Ground rents and event fees:
Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
|Santander|| Our minimum unexpired lease term is 55 years from completion, subject to at least 30 years remaining at the end of the mortgage term (an individual case instruction may provide for a shorter unexpired term). However, 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
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.
|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 procure New 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 lawyer we work with provide it.
During the course of the last few months Kyle, started to get close to the eighty-year mark with the lease on his purpose- built apartment in New Eltham. Having purchased his property two decades ago, the length of the lease was of minimal relevance. Luckily, he became aware that he needed to take action soon on a lease extension. Kyle arranged for a lease extension just under the wire in August. Kyle and the landlord who owned the flat above eventually agreed on a premium of £5,000 . If he not met the deadline, the sum would have increased by at least £1,025.
Last year we were e-mailed by Mr and Mrs. U Adams , who owned a garden flat in New Eltham in January 1996. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Comparable properties in New Eltham with a long lease were valued around £285,000. The average amount of ground rent was £45 collected quarterly. The lease finished in 2090. Considering the 71 years left we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus professional charges.
An example of a Lease Extension decision for a New Eltham flat 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.