Charlton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Charlton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Charlton you must check if your lease has between seventy and ninety years left. There are compelling reasons why a Charlton leaseholder with a lease having around 80 years remaining should take action to ensure that a lease extension is put in place without delay
Leasehold premises in Charlton with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
The conveyancers that we work with handle Charlton 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.
16 months ago Harvey, started to get close to the 80-year mark with the lease on his basement flat in Charlton. Having purchased his flat 19 years ago, the lease term was of little relevance. by good luck, he noticed he would soon be paying an escalated premium for a lease extension. Harvey arranged for a lease extension just under the wire in August. Harvey and the freeholder eventually settled on a premium of £5,000 . If he had missed the deadline, the price would have become more exhorbitant by at least £1,000.
In 2014 we were approached by Mr and Mrs. Y Rodríguez who, having acquired a one bedroom apartment in Charlton in November 1998. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Identical residencies in Charlton with an extended lease were valued around £200,800. The average amount of ground rent was £65 invoiced yearly. The lease terminated in 2086. Taking into account 60 years remaining we estimated the premium to the freeholder to extend the lease to be between £20,900 and £24,200 plus legals.
An example of a Lease Extension decision for a Charlton flat is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case affected 2 flats. The unexpired term as at the valuation date was 72 years.