The re-sale value of a leasehold property in Seven Kings is impacted by how long the lease has remaining. If it is near to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension before purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be finalised in advance of the 80 year mark. Statute entitles Seven Kings qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of 90 years. The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Seven Kings with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
Lender | Requirement |
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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. |
Birmingham Midshires | Minimum 70 years from the date 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. |
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. |
The conveyancing solicitors that we work with undertake Seven Kings 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 conveyancing solicitor we work with provide it.
During the course of the last few months Lewis, came very close to the eighty-year mark with the lease on his studio flat in Seven Kings. In buying his flat 19 years ago, the unexpired term was of no importance. by good luck, he realised he would imminently be paying an escalated premium for a lease extension. Lewis arranged for a lease extension just under the wire last March. Lewis and the freeholder ultimately settled on the final figure of £5,500 . If the lease had dipped to less than 80 years, the amount would have increased by a minimum £875.
Last Autumn we were approach by Mr G Evans , who bought a one bedroom apartment in Seven Kings in July 1997. We are asked if we could approximate the premium would likely be to extend the lease by a further 90 years. Similar premises in Seven Kings with an extended lease were valued about £235,200. The average ground rent payable was £45 billed quarterly. The lease came to a finish in 2091. Given that there were 66 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.
An example of a Lease Extension decision for a Seven Kings property is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case affected 1 flat. The number of years remaining on the existing lease(s) was 61.36 years.