Charlton Lease Extension - Free Consultation

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Why you should commence your Charlton lease extension

Top reasons for lease extension now:

Increase your lease and increase your Charlton property value

The market value of Charlton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is less than eighty years

An extended lease is almost the same value as a freehold

Leasehold premises in Charlton with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.

Mortgage lenders may decide not to issue a mortgage on a short lease

The trend since the credit crunch has been for mortgage companies to tighten lending requirements across the board - this has extended to the property over which the home loan is to be charged. This has meant the minimum number of years remaining under the lease required by lenders has increased. Historically banks would lend on a lease with twenty years plus the term of the loan - routinely fifty year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many use a minimum term of 75 years as a prerequisite.

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.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Nationwide Building Society Our minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term.
Report to the issuing office if the lease term is shorter than that stated on the offer and has less than 100 years remaining. (There is no requirement to report if the lease term is lower than that stated on the offer but still has 100 years or more to run, or if the lease term is longer than that stated on the offer).

NEW BUILD PROPERTIES (includes office conversions)
The following are not acceptable:
- The unexpired lease term is less than 125 years on a new build flat or 250 years on a new build house (does not apply to Shared Ownership)
- Starting ground rent is more than 0.1% of the property value
The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed.
Ground rents and event fees:
Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
Santander Our minimum unexpired lease term is 55 years from completion, subject to at least 30 years remaining at the end of the mortgage term (an individual case instruction may provide for a shorter unexpired term). However, you must report the unexpired lease term to us and await our instructions if:
1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or
2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or
3. no valuation report is provided
We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder.
Royal Bank of Scotland Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.

Why use us for your lease extension in Charlton?

Regardless of whether you are a tenant or a landlord in Charlton,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Charlton valuers.

Charlton Lease Extension Case Studies:

Naomi, Charlton, South East London,

After protracted discussions with the freeholder of her garden flat in Charlton, Naomi started the lease extension process as the eighty year threshold was fast coming. The lease extension was concluded in September 2006. The landlord’s costs were kept to an absolute minimum.

Charlton case:

Mr and Mrs. W Bell took over the lease of a one bedroom flat in Charlton in November 2000. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical flats in Charlton with an extended lease were in the region of £246,800. The average ground rent payable was £60 invoiced per annum. The lease ended in 2069. Considering the 50 years left we approximated the premium to the landlord for the lease extension to be within £44,700 and £51,600 exclusive of expenses.

Decision in Lewisham

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 remaining number of years on the lease was 72 years.