The rule of thumb is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Kensington have the right to extend the lease for a further ninety years in accordance with statute. Do give careful consideration before delaying your Kensington lease extension. Postponing the costs now simply escalates the price you will ultimately have to pay to extend the lease.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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 also be not less than 75 years at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
Subsequent to protracted negotiations with the freeholder of her purpose-built apartment in Kensington, Jodie initiated the lease extension process as the 80 year deadline was rapidly advancing. The legal work was concluded in July 2011. The freeholder’s charges were negotiated to a tad over 450 pounds.
Dr I Martinez took over the lease of a one bedroom apartment in Kensington in August 2006. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in Kensington with a long lease were in the region of £200,800. The average ground rent payable was £65 collected per annum. The lease elapsed in 2085. Taking into account 60 years as a residual term we calculated the premium to the landlord for the lease extension to be within £20,900 and £24,200 plus legals.
An example of a Lease Extension matter before the tribunal for a Kensington property is 93 Oakwood Court in June 2010. the LVT determined that the premium to be paid for the new lease was £492,083, This case was in relation to 1 flat. The unexpired term was 37.79 years.