It’s a harsh certainty that a Plumstead residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Plumstead property prices.Once your lease nears 85ish years, you need to 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 falls lower than eighty years - otherwise a higher premium will be due. Most flat owners in Plumstead will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| 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. |
Lease extensions in Plumstead can be a difficult process. We recommend you get guidance from a conveyancer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Plumstead lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Callum, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Plumstead. In buying his home two decades ago, the length of the lease was of little significance. Luckily, he noticed he would soon be paying an escalated premium for a lease extension. Callum was able to extend his lease at the eleventh hour last August. Callum and the freeholder subsequently agreed on sum of £6,000 . If he not met the deadline, the figure would have escalated by a minimum £1,000.
Last Spring we were contacted by Mr and Mrs. J Hernández , who owned a purpose-built apartment in Plumstead in July 2007. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Comparable premises in Plumstead with a long lease were valued around £232,800. The mid-range amount of ground rent was £45 invoiced quarterly. The lease ran out in 2090. Taking into account 65 years left we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including costs.
An example of a Lease Extension case for a Plumstead property 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.