The re-sale value of a leasehold property in Erith is impacted by how many years the lease has left to run. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that all matters can be concluded prior to the 80 year mark. Leasehold Reform legislation enables Erith qualifying lessees to acquire a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Erith with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. 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 |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 handle Erith 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.
Finn was the the leasehold proprietor of a conversion flat in Erith being marketed with a lease of a little over sixty years remaining. Finn informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Finn to invoke his statutory right. Finn procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the property.
In 2013 we were e-mailed by Dr R Lewis who, having completed a studio flat in Erith in April 1995. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparable homes in Erith with 100 year plus lease were worth £227,800. The mid-range ground rent payable was £45 collected yearly. The lease terminated in 2089. Having 65 years remaining we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of expenses.
An example of a Lease Extension case for a Erith premises 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 affected 13 flats. The unexpired term was 76 years.