Kemp Town leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Kemp Town residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Kemp Town you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is generally considered that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | 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 However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis 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. |
Irrespective of whether you are a tenant or a freeholder in Kemp Town,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 experience and the close ties they enjoy with Kemp Town valuers.
Two years ago Henry, started to get close to the 80-year mark with the lease on his studio flat in Kemp Town. In buying his home two decades ago, the unexpired term was of no relevance. by good luck, it dawned on him that he needed to take action soon on Extending the lease. Henry arranged for a lease extension just under the wire last August. Henry and the landlord who owned the flat above subsequently agreed on the final figure of £6,000 . If the lease had slid to less than eighty years, the sum would have increased by at least £1,050.
Dr Y Rose bought a first floor flat in Kemp Town in March 2006. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Identical premises in Kemp Town with an extended lease were worth £290,000. The average amount of ground rent was £45 billed monthly. The lease concluded in 2098. Considering the 73 years outstanding we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last Summer we were e-mailed by Mr and Mrs. N Wilson , who owned a newly refurbished flat in Kemp Town in June 2007. The dilemma was if we could estimate the premium could be to prolong the lease by ninety years. Identical homes in Kemp Town with a long lease were in the region of £240,600. The mid-range amount of ground rent was £60 billed yearly. The lease expired in 2087. Given that there were 62 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 not including expenses.