With a domestic leasehold property in Kemp Town, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than eighty years left. Anyone in Kemp Town with a lease nearing 81 years remaining should seriously think of extending it sooner rather than later. When the lease term has below eighty years outstanding, under the relevant statute the freeholder is entitled to calculate and levy a larger premium, based on a technical calculation, known as “marriage value” which is payable.
Leasehold premises in Kemp Town with more than 100 years left 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 premises. 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.
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Retaining our service will provide you enhanced control over the value of your Kemp Town leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Tommy was the the leasehold proprietor of a 2 bedroom flat in Kemp Town being sold with a lease of fraction over 59 years remaining. Tommy on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Tommy to invoke his statutory right. Tommy procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last Winter we were contacted by Ms D Reed , who moved into a purpose-built flat in Kemp Town in March 1996. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by a further 90 years. Similar premises in Kemp Town with an extended lease were in the region of £208,600. The average amount of ground rent was £60 collected every twelve months. The lease ran out in 2082. Given that there were 57 years remaining we calculated the compensation to the freeholder for the lease extension to be within £30,400 and £35,200 not including legals.
Dr M François purchased a purpose-built apartment in Kemp Town in November 2004. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Comparable homes in Kemp Town with an extended lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected yearly. The lease finished in 2102. Taking into account 77 years remaining we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus costs.