There is no doubt about it a leasehold property in Kensington is a wasting asset as a result of the diminishing lease term. If the residual term has, over 100 years to run then this decrease may be negligible that being said there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner than later. The majority of flat owners in Kensington will meet the qualifying criteria; however a conveyancing solicitor will be able to confirm whether you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold properties in Kensington with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 gives you enhanced control over the value of your Kensington leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Evan was the the leasehold proprietor of a 2 bedroom apartment in Kensington on the market with a lease of a little over 61 years left. Evan informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Evan to invoke his statutory right. Evan procured expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. Y Dupont completed a first floor flat in Kensington in March 2003. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar homes in Kensington with an extended lease were valued around £208,200. The average amount of ground rent was £65 invoiced monthly. The lease ran out in 2087. Taking into account 61 years left we approximated the premium to the landlord for the lease extension to be between £20,000 and £23,000 plus expenses.
An example of a Lease Extension decision for a Kensington premises 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 related to 1 flat. The remaining number of years on the lease was 37.79 years.