Unfortunately that a Kingsbury residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Kingsbury property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be due. Most flat owners in Kingsbury will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold premises in Kingsbury with over 100 years unexpired on the lease are often 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 reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
Irrespective of whether you are a tenant or a freeholder in Kingsbury,the lease extension experts 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 Kingsbury valuers.
Two years ago Oscar, started to get near to the 80-year threshold with the lease on his garden flat in Kingsbury. In buying his home twenty years previously, the lease term was of no relevance. Luckily, he noticed he needed to take action soon on Extending the lease. Oscar was able to extend his lease at the eleventh hour last April. Oscar and the landlord who owned the flat above ultimately agreed on a premium of £6,000 . If the lease had fallen lower than eighty years, the sum would have gone up by a minimum £925.
In 2009 we were approached by Dr U Walker who, having acquired a ground floor flat in Kingsbury in January 2002. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Kingsbury with 100 year plus lease were in the region of £233,200. The average amount of ground rent was £60 invoiced annually. The lease terminated in 2087. Given that there were 61 years left we estimated the premium to the landlord for the lease extension to be within £22,800 and £26,400 plus fees.
An example of a Lease Extension case for a Kingsbury residence is 27B Hillside in February 2010. the resulting premium, all other aspects of the valuation having been agreed between the parties was set at £8,250 This case affected 1 flat. The unexpired term as at the valuation date was 70.25 years.