Kempsey leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Kempsey enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Kempsey you should see if your lease has between seventy and 90 years left. There are compelling reasons why a Kempsey flat owner with a lease having around eighty years left should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Kempsey with more than 100 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 property. 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 |
|---|---|
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Kempsey 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 lawyer we work with provide it.
Leon owned a conversion flat in Kempsey being marketed with a lease of a little over 59 years outstanding. Leon informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Leon to invoke his statutory right. Leon obtained expert advice and secured satisfactory deal without going to tribunal and sell the property.
In 2014 we were called by Dr L Richardson who, having took over the lease of a studio flat in Kempsey in November 2007. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar properties in Kempsey with a long lease were worth £200,000. The average ground rent payable was £50 collected annually. The lease lapsed on 20 May 2102. Taking into account 77 years outstanding we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.
In 2009 we were called by Mr and Mrs. J Baker who, having moved into a basement apartment in Kempsey in September 2010. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Identical residencies in Kempsey with an extended lease were in the region of £260,200. The average ground rent payable was £65 invoiced annually. The lease termination date was in 2091. Considering the 66 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus expenses.