On the balance of probabilities where you own a flat in Charlton you actually own a long leasehold interest over your property
It is generally accepted that a property with over 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 premises will be equivalent in value to 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with procure 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 lawyer we work with provide it.
During the course of the last few months Kyle, came dangerously close to the 80-year threshold with the lease on his purpose- built apartment in Charlton. In buying his property two decades ago, the length of the lease was of minimal importance. by good luck, he became aware that he would imminently be paying way over the odds for Extending the lease. Kyle extended the lease just under the wire in January. Kyle and the freeholder in the end agreed on a premium of £5,500 . If the lease had descended lower than 80 years, the amount would have gone up by at least £1,000.
Last Spring we were called by Dr Alicia Phillips , who took over the lease of a first floor flat in Charlton in July 2001. We are asked if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparable properties in Charlton with a long lease were worth £235,200. The mid-range ground rent payable was £45 invoiced quarterly. The lease concluded on 7 March 2090. Having 66 years outstanding we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including legals.
An example of a Lease Extension decision for a Charlton premises 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 was 72 years.