Chances are that where you own a flat in Kensington you actually own a long leasehold interest over your property
Leasehold residencies in Kensington with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Kensington 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 conveyancing solicitor we work with provide it.
Finn was the the leasehold owner of a studio apartment in Kensington being marketed with a lease of just over 59 years left. Finn on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Finn to exercise his statutory right. Finn procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.
Mr Isaac Carter was assigned a lease of a first floor flat in Kensington in August 1998. The dilemma was if we could estimate the price would likely be for a 90 year extension to my lease. Identical flats in Kensington with a long lease were worth £254,200. The mid-range amount of ground rent was £60 billed every twelve months. The lease ended in 2077. Considering the 51 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Kensington property is 93 Oakwood Court in June 2010. the LVT determined that the premium to be paid for the new lease was £492,083, This case was in relation to 1 flat. The unexpired term as at the valuation date was 37.79 years.