Top reasons for New Eltham lease extension

Top reasons for lease extension now:

A New Eltham leasehold property depreciates with the years remaining on the lease.

It’s an underpublicised certainty that a New Eltham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the New Eltham property prices.Once your lease nears 85ish years, you should start thinking about 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 under 80 years - otherwise a higher amount will be due. The majority of flat owners in New Eltham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.

An extended lease has roughly the same value as a freehold

Leasehold properties in New Eltham with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.

Lending institutions may not grant a mortgage with a short lease

The propensity since 2008 has been for banks to tighten lending requirements across the board - this has extended to the types of security over which the home loan is to be granted. This has meant the minimum number of years remaining under the lease required by mortgage companies has increased. Historically banks would grant a mortgage on a lease with twenty years plus the term of the loan - routinely 50 year leases but those requirements evolved by the requirement for lengthy leases - many use a minimum term of 75 years as a prerequisite.

Get in touch with one of our New Eltham lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a freeholder in New Eltham,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with New Eltham valuers.

New Eltham Lease Extension Case Studies:

Danielle, New Eltham, South East London,

Following protracted discussions with the landlord of her garden apartment in New Eltham, Danielle started the lease extension process just as her lease was coming close to the critical eighty-year threshold. The legal work completed in July 2013. The freeholder’s fees were negotiated to about five hundred pounds.

New Eltham case:

Last February we were called by Mr Logan Stewart , who purchased a purpose-built flat in New Eltham in February 2011. The question was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar flats in New Eltham with an extended lease were in the region of £223,400. The mid-range ground rent payable was £60 billed annually. The lease expiry date was on 6 February 2085. Given that there were 59 years remaining we approximated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 exclusive of expenses.