As the the remaining lease term of a South Kensington residential lease decreases so does its value and therefore the value of your property. Where the residual term has, over 100 years to run then this decrease may be negligible that being said there will become a stage when a lease has under than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main logic behind why you should consider extending sooner rather than later. The majority of flat owners in South Kensington will qualify for this right; that being said a conveyancing solicitor can confirm if you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold premises in South Kensington with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure South Kensington 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.
Last October Teddy, started to get near to the eighty-year threshold with the lease on his two bedroom flat in South Kensington. Having bought his home 19 years ago, the length of the lease was of little concern. As luck would have it, he noticed he needed to take steps soon on a lease extension. Teddy was able to extend his lease at the eleventh hour in May. Teddy and the landlord ultimately agreed on the final figure of £6,000 . If he failed to meet the deadline, the amount would have increased by a minimum £950.
Mr and Mrs. T Edwards took over the lease of a recently refurbished apartment in South Kensington in June 2006. The dilemma was if we could estimate the premium would likely be to extend the lease by ninety years. Comparative properties in South Kensington with an extended lease were valued around £210,000. The average ground rent payable was £50 collected annually. The lease concluded in 2105. Given that there were 80 years outstanding we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
An example of a Lease Extension decision for a South Kensington residence is Flat 16 21/22 Stanhope Gardens in November 2010. the Leasehold Valuation Tribunal concluded that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993, was £106,975 This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 51.93 years.