Kimbolton leases on residential properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start thinking about a lease extension. If lease term falls under eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Kimbolton will usually qualify for a lease extension; however It would be wise to check with a conveyancer to check if you qualify. In certain situations you may not qualify. There are prescribed timetables and procedures to follow once the process is triggered so it’s prudent to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with handle Kimbolton 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 conveyancer we work with provide it.
Kyle owned a conversion apartment in Kimbolton on the market with a lease of fraction over 72 years left. Kyle informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kyle to exercise his statutory right. Kyle procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
In 2012 we were called by Mr E Bertrand who, having purchased a first floor flat in Kimbolton in October 2002. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Identical properties in Kimbolton with 100 year plus lease were in the region of £233,200. The mid-range amount of ground rent was £60 invoiced quarterly. The lease ran out on 22 May 2086. Given that there were 61 years left we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 not including costs.
In 2013 we were contacted by Ms Hannah Thomas who, having owned a one bedroom flat in Kimbolton in March 2006. The dilemma was if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable premises in Kimbolton with an extended lease were in the region of £166,800. The mid-range amount of ground rent was £50 billed per annum. The lease lapsed on 1 March 2075. Considering the 50 years left we calculated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 not including costs.