As the length of the unexpired term of a Seven Kings domestic lease decreases so does its value and therefore the value of your property. Where the residual term has, over 100 years remaining then this decrease may be of little impact however there will become a stage when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner rather than later. Many flat owners in Seven Kings will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise whether you qualify to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold premises in Seven Kings with over 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 premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Retaining our service gives you better control over the value of your Seven Kings leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Andrew, started to get close to the 80-year threshold with the lease on his leasehold apartment in Seven Kings. In buying his flat 19 years previously, the lease term was of no bearing. by good luck, he became aware that he would imminently be paying an inflated amount for a lease extension. Andrew arranged for a lease extension just under the wire last August. Andrew and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If he not met the deadline, the price would have escalated by a minimum £875.
Last Summer we were phoned by Mrs B Walker , who owned a one bedroom flat in Seven Kings in April 2003. The question was if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparable properties in Seven Kings with a long lease were worth £290,000. The mid-range ground rent payable was £55 invoiced yearly. The lease concluded on 22 February 2105. Given that there were 80 years remaining we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.
An example of a Lease Extension decision for a Seven Kings premises 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 unexpired term as at the valuation date was 61.36 years.