There is no doubt about it a leasehold flat or house in Kensington is a wasting asset as a result of the shortening lease. If the residual term has, in excess of 125 years to run then this decrease may be negligible however there will become a point in time when a lease has fewer than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main logic behind why you should extend the lease without delay. The majority of flat owners in Kensington will qualify for this right; however a lawyer will be able to confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally accepted that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Kensington leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful discussions with the landlord of her basement flat in Kensington, Rachael commenced the lease extension process just as the lease was nearing the crucial eighty-year threshold. The lease extension was finalised in October 2014. The freeholder’s costs were negotiated to a tad over 500 GBP.
Ms Kate Ali took over the lease of a ground floor flat in Kensington in November 2009. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Similar residencies in Kensington with an extended lease were worth £227,800. The mid-range ground rent payable was £45 collected yearly. The lease end date was on 3 March 2090. Taking into account 65 years left we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus professional charges.
An example of a Lease Extension case for a Kensington flat 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 unexpired lease term was 37.79 years.