Main reasons to start your New Eltham lease extension
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<h3> Top reasons for lease extension now:
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/new-eltham">New Eltham</a> property value </h4>
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New Eltham leases on domestic properties are gradually losing value. if your lease has about ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for the lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher amount will be payable. Flat owners in New Eltham will mostly be legally entitled to a lease extension; however It would be wise to check with a lawyer to check your eligibility. In certain cases you may not be entitled. There are prescribed timetables and formalities to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
<h4>An extended lease has roughly the same value as a freehold</h4>
<p> It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
<h4>Mortgage lenders may not issue a mortgage on a short lease</h4> Lending institutions are less likely to give a loan offer on a domestic flat in New Eltham with a short lease. Many lenders simply refuse to lend on leases with less than 75 years left.
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<th> Requirement
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<td>Accord Mortgages</td>
<td> 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.
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<td>Barnsley Building Society</td>
<td> 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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<td>Chelsea Building Society</td>
<td> 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.
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<td>Nationwide Building Society</td>
<td> - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years. <br />- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).<br /><br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br />- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. <br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 55 years<br />- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period is less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 55 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (Will be declined)<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house<br />- A lease subject to a peppercorn Ground Rent (Annual Rent) charges<br /><br />For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance. <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?<br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years.<br /><br />Lease Extensions<br /><br />We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office. <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>TSB</td>
<td> Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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What makes us experts in New Eltham lease extensions?
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<p> Regardless of whether you are a tenant or a freeholder in New Eltham,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with New Eltham valuers.
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New Eltham Lease Extension Example Cases:
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<h5> Kian, New Eltham, South East London</h5>
<p> In recent months Kian, came critically close to the eighty-year mark with the lease on his first floor flat in New Eltham. Having purchased his flat 19 years ago, the length of the lease was of little significance. As luck would have it, he noticed he would soon be paying an inflated amount for Extending the lease. Kian was able to extend his lease at the eleventh hour in March. Kian and the freeholder via the management company eventually settled on an amount of £5,500 . If he had missed the deadline, the premium would have escalated by a minimum £875.
<h5>New Eltham case:</h5>
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In 2009 we were contacted by Mr L Clarke who, having purchased a one bedroom flat in New Eltham in September 1998. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical premises in New Eltham with an extended lease were worth £290,000. The mid-range ground rent payable was £45 billed per annum. The lease terminated on 9 February 2099. Given that there were 73 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
<div> <h5>Decision in Greenwich</h5>
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An example of a Lease Extension decision 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 affected 1 flat.
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