The re-sale value of a leasehold property in New Eltham is impacted by how many years the lease has left to run. If it is near to or less than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension prior to buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that all matters can be finalised in advance of the 80 year threshold. Statute enables New Eltham qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a landlord in New Eltham,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Eltham valuers.
16 months ago Eliot, started to get close to the 80-year threshold with the lease on his ground floor apartment in New Eltham. Having purchased his flat 18 years ago, the length of the lease was of no bearing. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Eliot arranged for a lease extension at the eleventh hour last September. Eliot and the freeholder via the managing agents in the end agreed on an amount of £6,000 . If he failed to meet the deadline, the premium would have increased by a minimum £875.
Mr and Mrs. U Brooks purchased a garden flat in New Eltham in January 2008. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar premises in New Eltham with 100 year plus lease were worth £275,000. The average ground rent payable was £65 collected monthly. The lease end date was in 2093. Taking into account 68 years left we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including professional charges.
An example of a Lease Extension case for a New Eltham premises 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 affected 1 flat.