For those whose Plumstead flat is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
Leasehold residencies in Plumstead with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Plumstead lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last year Oliver, started to get close to the 80-year mark with the lease on his purpose- built flat in Plumstead. Having bought his home two decades ago, the unexpired term was of minimal bearing. As luck would have it, he realised he would soon be paying way over the odds for a lease extension. Oliver was able to extend his lease just in the nick of time in April. Oliver and the freeholder via the management company ultimately agreed on an amount of £5,500 . If the lease had gone below eighty years, the amount would have gone up by a minimum £950.
Last Autumn we were approach by Ms E Gómez , who was assigned a lease of a purpose-built flat in Plumstead in August 2003. The question was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by an additional years. Comparable properties in Plumstead with a long lease were worth £218,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease termination date was in 2088. Having 63 years unexpired we approximated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 plus expenses.
An example of a Lease Extension decision 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.