Kenilworth residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold premises in Kenilworth with in excess of one hundred years left 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 premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| 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. |
The conveyancers that we work with handle Kenilworth 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.
In the wake of eight months of protracted discussions with the landlord of her one bedroom apartment in Kenilworth, Kirsty commenced the lease extension process as the eighty year mark was fast approaching. The lease extension completed in July 2015. The landlord’s fees were kept to an absolute minimum.
In 2010 we were approached by Dr Bethany Brown who, having acquired a one bedroom apartment in Kenilworth in November 2002. We are asked if we could estimate the premium would be for a ninety year lease extension. Similar residencies in Kenilworth with an extended lease were worth £254,200. The mid-range amount of ground rent was £60 invoiced per annum. The lease ended on 25 August 2076. Having 51 years left we estimated the compensation to the freeholder for the lease extension to be between £43,700 and £50,600 plus professional charges.
Mr and Mrs. O Anderson completed a studio flat in Kenilworth in September 2001. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical homes in Kenilworth with a long lease were worth £210,600. The average amount of ground rent was £45 collected per annum. The lease ended on 26 June 2087. Having 62 years left we calculated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of legals.