The value of Kentish Town leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is below than eighty years
Leasehold residencies in Kentish Town with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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 be at least 75 years plus the term of the mortgage 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. |
| 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. |
The conveyancing solicitors that we work with procure Kentish Town 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.
Luke owned a studio apartment in Kentish Town on the market with a lease of a few days over 72 years unexpired. Luke on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luke to invoke his statutory right. Luke procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2013 we were contacted by Ms Georgia Campbell who, having moved into a ground floor apartment in Kentish Town in January 2008. The question was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable residencies in Kentish Town with an extended lease were valued about £254,200. The average ground rent payable was £60 collected quarterly. The lease ran out in 2077. Taking into account 51 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Kentish Town residence is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case related to 1 flat. The unexpired residue of the current lease was 64.77 years.