When it comes to domestic leasehold premises in New Eltham, you are actually purchasing a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Anyone in New Eltham with a lease approaching 81 years left should seriously consider extending it sooner as opposed to later. Once the lease term has less than eighty years left, under the relevant Act the landlord is entitled to calculate and demand a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a freeholder in New Eltham,the lease extension solicitors 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.
Off the back of unsuccessful negotiations with the freeholder of her purpose-built apartment in New Eltham, Alexandra started the lease extension process as the eighty year threshold was swiftly nearing. The transaction completed in July 2005. The freeholder’s charges were kept to an absolute minimum.
Last Autumn we were approach by Dr M Gray , who took over the lease of a ground floor apartment in New Eltham in October 2012. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar homes in New Eltham with an extended lease were in the region of £191,400. The average amount of ground rent was £55 invoiced annually. The lease finished on 7 October 2080. Given that there were 54 years left we estimated the compensation to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of legals.
An example of a Lease Extension case for a New Eltham residence 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.