Kingsbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Kingsbury tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Kingsbury you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Kingsbury with in excess of one hundred years left 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 home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
Regardless 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.
Milo was the the leasehold owner of a high value flat in Kingsbury on the market with a lease of just over 72 years unexpired. Milo on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Milo to invoke his statutory right. Milo procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
In 2013 we were called by Mr and Mrs. I André who, having bought a purpose-built apartment in Kingsbury in June 2007. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparative residencies in Kingsbury with a long lease were valued around £174,200. The average ground rent payable was £55 invoiced monthly. The lease came to a finish on 8 August 2076. Taking into account 51 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 not including fees.
An example of a Lease Extension decision for a Kingsbury property 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 was in relation to 1 flat. The unexpired lease term was 70.25 years.