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Top reasons for Kensington lease extension

Why you should start your Kensington lease extension today:

A Kensington lease depreciates with the years remaining on the lease.

The value of Kensington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the unexpired lease term is less than 80 years

An extended lease is almost the same value as a freehold

Leasehold premises in Kensington with over one hundred years remaining 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.

Lending institutions may decide not to loan monies on a short lease

The propensity since the credit crunch has been for lenders to tighten lending requirements generally - this has extended to the property over which the mortgage is to be charged. This has meant the minimum number of years remaining under the lease required by banks has increased. In the past mortgage companies would lend on a lease with 25 years plus the term of the loan - routinely 50 year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many use a minimum term of 75 years as standard.

Lender Requirement
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.
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.
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.

Why use us for your lease extension in Kensington?

Regardless of whether you are a tenant or a freeholder in Kensington,the lease extension experts 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 Kensington valuers.

Kensington Lease Extension Example Cases:

Jonathan, Kensington, West London

Last year Jonathan, started to get close to the 80-year threshold with the lease on his first floor flat in Kensington. Having bought his home two decades ago, the length of the lease was of little importance. Thankfully, he noticed he needed to take steps soon on Extending the lease. Jonathan was able to extend his lease at the eleventh hour last July. Jonathan and the freeholder via the management company subsequently agreed on a premium of £5,000 . If he failed to meet the deadline, the amount would have gone up by at least £1,125.

Kensington case:

Mr and Mrs. O Lewis owned a studio apartment in Kensington in August 2012. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by an additional years. Comparative homes in Kensington with an extended lease were in the region of £246,800. The average ground rent payable was £60 invoiced monthly. The lease expiry date was on 15 April 2075. Having 50 years remaining we estimated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 exclusive of costs.

Decision in Kensington and Chelsea

An example of a Lease Extension matter before the tribunal for a Kensington residence 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 affected 1 flat. The unexpired term as at the valuation date was 37.79 years.