On the balance of probabilities if you own a flat in Kensington you actually own a long leasehold interest over your property
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
The lawyers that we work with undertake 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 lawyer we work with provide it.
Off the back of lengthy correspondence with the landlord of her purpose-built apartment in Kensington, Molly commenced the lease extension process just as her lease was approaching the all-important eighty-year mark. The legal work completed in September 2010. The landlord’s fees were restricted to less than 700 GBP.
In 2011 we were called by Ms D Bonnet who, having took over the lease of a studio flat in Kensington in August 1997. We are asked if we could approximate the premium would be to prolong the lease by an additional years. Identical premises in Kensington with 100 year plus lease were worth £176,200. The average ground rent payable was £65 invoiced every twelve months. The lease end date was on 15 November 2081. Having 56 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 plus costs.
An example of a Lease Extension decision for a Kensington premises 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 affected 1 flat. The remaining number of years on the lease was 37.79 years.