Seven Kings leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Seven Kings tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Seven Kings you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Seven Kings with more than one hundred years outstanding on the lease are sometimes regarded as a ‘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 freehold unless savings on ground rent and maintenance charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancers 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 conveyancer we work with provide it.
Theo owned a 2 bedroom flat in Seven Kings on the market with a lease of a little over sixty years unexpired. Theo on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Theo to exercise his statutory right. Theo obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Dr Lily Moore took over the lease of a first floor flat in Seven Kings in May 1995. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year extension to my lease. Comparative premises in Seven Kings with a long lease were in the region of £183,600. The average ground rent payable was £65 invoiced quarterly. The lease expired on 27 July 2082. Having 57 years outstanding we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of costs.
An example of a Lease Extension decision for a Seven Kings residence 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 was in relation to 1 flat. The remaining number of years on the lease was 61.36 years.