Kennington leases on residential properties are gradually losing value. Where your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for a lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be due. Flat owners in Kennington will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm your eligibility. In some situations you may not qualify. There are prescribed deadlines and procedures to comply with once the process has started so it’s wise to be guided by a lawyer during the process.
Leasehold properties in Kennington with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Yorkshire 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. |
Retaining our service will provide you increased control over the value of your Kennington leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Logan, came dangerously near to the eighty-year mark with the lease on his leasehold apartment in Kennington. Having bought his home two decades ago, the length of the lease was of no significance. Luckily, he became aware that he needed to take steps soon on a lease extension. Logan arranged for a lease extension just in the nick of time last March. Logan and the freeholder via the management company ultimately settled on sum of £5,500 . If he failed to meet the deadline, the price would have increased by at least £1,000.
Last month we were phoned by Mrs E Wright , who completed a one bedroom apartment in Kennington in June 2002. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical premises in Kennington with an extended lease were worth £225,800. The mid-range ground rent payable was £60 collected quarterly. The lease termination date was in 2086. Given that there were 60 years unexpired we approximated the premium to the freeholder to extend the lease to be within £24,700 and £28,600 not including legals.
An example of a Lease Extension matter before the tribunal for a Kennington property is Ground Floor Flat 39 Bronsart Road in May 2010. Following a vesting order by West London County Court the Leasehold Valuation Tribunal concluded that the price to be paid for the extended lease of the premises was Thirteen Thousand Two hundred pounds (£13,200) in accordance with the valuation. The extended lease was granted for a term of 90 years from the expiry date of the Lease and at a peppercorn ground rent from the date of the vesting order. This case related to 1 flat. The unexpired lease term was 74.77 years.