Kempston leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Kempston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Kempston you really ought to investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Kempston leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Omar, came precariously close to the eighty-year mark with the lease on his one bedroom flat in Kempston. Having bought his home two decades ago, the lease term was of little significance. As luck would have it, he realised he would soon be paying an escalated premium for a lease extension. Omar was able to extend his lease just under the wire in September. Omar and the landlord who owned the flat above ultimately settled on sum of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £1,000.
In 2011 we were phoned by Dr Dexter Moore who, having moved into a garden apartment in Kempston in January 2004. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical flats in Kempston with 100 year plus lease were valued around £248,000. The mid-range amount of ground rent was £65 billed annually. The lease lapsed on 18 February 2089. Given that there were 63 years as a residual term we calculated the premium to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of expenses.
Last Spring we were e-mailed by Ms Jennifer Jackson , who took over the lease of a one bedroom flat in Kempston in April 2012. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Identical premises in Kempston with an extended lease were worth £181,600. The mid-range ground rent payable was £55 billed monthly. The lease ended in 2078. Having 52 years unexpired we estimated the premium to the landlord to extend the lease to be within £30,400 and £35,200 plus fees.