Plumstead leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Plumstead residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Plumstead you should see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent 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 |
|---|---|
| Bank of Scotland | 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. |
| 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
The conveyancing solicitors that we work with procure 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.
18 months ago Milo, started to get close to the 80-year mark with the lease on his studio flat in Plumstead. Having bought his property two decades ago, the length of the lease was of little significance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Milo arranged for a lease extension at the eleventh hour in June. Milo and the landlord subsequently settled on an amount of £5,500 . If the lease had dropped below eighty years, the figure would have gone up by at least £1,075.
Mrs W Bernard completed a one bedroom flat in Plumstead in January 2002. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparable properties in Plumstead with a long lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease ended on 16 October 2089. Taking into account 63 years as a residual term we estimated the premium to the landlord to extend the lease to be within £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 related to 1 flat.