Unfortunately that a Kempston residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Kempston property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Kempston will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold premises in Kempston 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 property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Lease extensions in Kempston can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Kempston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
David was the the leasehold proprietor of a 2 bedroom apartment in Kempston being marketed with a lease of just over fifty eight years outstanding. David on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 per annum. No ground rent would be due on a lease extension were David to invoke his statutory right. David obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2011 we were phoned by Mr and Mrs. A Norbert who, having owned a garden apartment in Kempston in January 1998. The question was if we could estimate the price would be for a ninety year lease extension. Identical flats in Kempston with an extended lease were valued about £174,200. The average amount of ground rent was £55 collected annually. The lease concluded in 2077. Given that there were 51 years remaining we calculated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of fees.
Mr and Mrs. N Davies bought a garden apartment in Kempston in August 1996. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Identical premises in Kempston with a long lease were worth £285,000. The average amount of ground rent was £45 invoiced per annum. The lease expired on 3 March 2097. Considering the 71 years unexpired we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 plus fees.