For anyone whose Kew property is held on a long lease, our message is clear – if you ignore the situation, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
Leasehold properties in Kew with in excess of one hundred years unexpired on the lease are often regarded as a ‘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 to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Coventry Building Society | 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Kew,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Kew valuers.
Last October Jude, came critically near to the 80-year threshold with the lease on his first floor flat in Kew. Having bought his flat two decades ago, the unexpired term was of little relevance. Luckily, he realised he would soon be paying an inflated amount for Extending the lease. Jude extended the lease just under the wire in September. Jude and the freeholder eventually agreed on a premium of £5,500 . If he failed to meet the deadline, the figure would have escalated by a minimum £950.
Ms L Evans bought a one bedroom apartment in Kew in May 2004. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Kew with 100 year plus lease were worth £205,000. The average amount of ground rent was £50 billed quarterly. The lease expiry date was on 19 February 2105. Given that there were 79 years remaining we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension case for a Kew property is Flat 1 30 Ennismore Avenue in September 2010. the Tribunal adopted and arrived at a premium for the lease extension of £29, 900 This case related to 1 flat. The unexpired residue of the current lease was 68.34 years.