Unfortunately that a Thamesmead residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Thamesmead property market.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 slips under eighty years - otherwise a higher premium will be due. Most flat owners in Thamesmead will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with handle Thamesmead 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 conveyancing solicitor we work with provide it.
Off the back of protracted correspondence with the freeholder of her purpose-built flat in Thamesmead, Paige initiated the lease extension process just as the lease was approaching the critical 80-year threshold. The transaction completed in October 2007. The freeholder’s charges were restricted to a tad over four hundred pounds.
Last month we were phoned by Mr and Mrs. Y Rivera , who completed a one bedroom flat in Thamesmead in February 2006. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative properties in Thamesmead with 100 year plus lease were valued about £264,000. The average ground rent payable was £60 billed quarterly. The lease end date was in 2079. Given that there were 53 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £37,100 and £42,800 plus fees.
An example of a Lease Extension matter before the tribunal for a Thamesmead residence is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case was in relation to 13 flats. The unexpired lease term was 76 years.