It’s an underpublicised certainty that a Plaistow residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Plaistow property market.Where your lease has approximately ninety years left, you should start considering 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 falls lower than eighty years - otherwise a higher amount will be due. The majority of flat owners in Plaistow will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Plaistow leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
14 months ago Leo, started to get close to the 80-year mark with the lease on his one bedroom flat in Plaistow. In buying his home two decades ago, the lease term was of no importance. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. Leo was able to extend his lease just in the nick of time last January. Leo and the landlord who owned the flat above ultimately agreed on a premium of £5,000 . If he had missed the deadline, the sum would have gone up by at least £1,150.
In 2012 we were contacted by Mr W Reed who, having moved into a one bedroom flat in Plaistow in March 2008. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by ninety years. Comparable flats in Plaistow with an extended lease were valued around £275,000. The mid-range amount of ground rent was £55 collected monthly. The lease concluded on 13 June 2099. Given that there were 76 years left we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of fees.
An example of a Lease Extension case for a Plaistow premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired term was 69.77 years.