As the the remaining lease term of a New Eltham residential lease lessens so does its value and therefore the value of your property. Where the lease has, over one hundred years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has under than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary reason why you should consider extending sooner as opposed to later. Most flat owners in New Eltham will meet the qualifying criteria; however a conveyancing solicitor can advise if you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake New Eltham 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.
Joshua was the the leasehold owner of a high value flat in New Eltham being sold with a lease of fraction over 72 years remaining. Joshua informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Joshua to invoke his statutory right. Joshua procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last January we were called by Dr Danielle Lefèvre , who acquired a garden apartment in New Eltham in February 2005. The dilemma was if we could estimate the price could be to prolong the lease by a further 90 years. Comparable properties in New Eltham with a long lease were worth £200,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease expired in 2103. Given that there were 77 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.
An example of a Lease Extension case for a New Eltham flat 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.