When it comes to domestic leasehold property in Kilburn, you effectively rent it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Anyone in Kilburn with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. When the lease term has below 80 years left, under the relevant Act the landlord is entitled to calculate and levy a larger amount, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Kilburn with more than one hundred years left 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 upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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 |
Engaging our service gives you enhanced control over the value of your Kilburn leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Edward owned a high value flat in Kilburn on the market with a lease of just over 61 years left. Edward on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Edward to exercise his statutory right. Edward obtained expert advice and secured satisfactory deal informally and readily saleable.
In 2014 we were e-mailed by Dr T Laurent who, having acquired a one bedroom flat in Kilburn in November 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Identical homes in Kilburn with a long lease were worth £295,000. The average amount of ground rent was £45 billed monthly. The lease finished in 2101. Having 75 years unexpired we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.
An example of a Freehold Enfranchisement decision for a Kilburn premises is 4 & 4A Charteris Road in June 2009. the Tribunal held that the price to be paid for the enfranchisement of 4/4a Charteris Road to be £15,510 for at 4and £15,694 for at 4a This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 70.02 years.