It’s a harsh certainty that a Charing Cross residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Charing Cross property prices.Once your lease nears 85ish years, you should 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 dips below 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Charing Cross will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Charing Cross can be a difficult process. We recommend you obtain professional help from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Charing Cross lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Felix owned a high value apartment in Charing Cross being sold with a lease of fraction over 61 years remaining. Felix on an informal basis spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Felix to exercise his statutory right. Felix procured expert advice and secured satisfactory deal informally and sell the property.
In 2009 we were contacted by Dr Courtney Lewis who, having completed a recently refurbished apartment in Charing Cross in October 1995. The question was if we could approximate the price would be to extend the lease by ninety years. Similar residencies in Charing Cross with an extended lease were in the region of £208,600. The average amount of ground rent was £60 invoiced per annum. The lease expired on 1 May 2083. Considering the 57 years as a residual term we calculated the premium to the landlord to extend the lease to be within £30,400 and £35,200 not including fees.
An example of a Freehold Enfranchisement decision for a Charing Cross flat is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case affected 1 flat. The number of years remaining on the existing lease(s) was 73.26 years.