Kensington residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
Leasehold properties in Kensington with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
|Bank of Scotland|| Minimum 70 years from the date of the mortgage.|
|Barnsley Building Society||60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.|
|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.|
|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.|
|The Mortgage Works|| Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. Report to the issuing office if the lease term is shorter than that stated within the Offer and has less than 100 years remaining.(There is no requirement to report if the lease term is lower than that stated on the Offer but still has 100 years or more to run, or if the lease term is longer than that stated on the Offer).|
NEW BUILD PROPERTIES (includes office conversions)
The following are not acceptable:
- The unexpired lease term on a new build flat is less than 125 years
- The unexpired lease term on a new build house is less than 250 years
- Starting ground rent is more than 0.1% of the property value
The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed.
Ground rents and event fees:
Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
Regardless of whether you are a tenant or a freeholder in Kensington,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Kensington valuers.
Following lengthy correspondence with the freeholder of her garden flat in Kensington, Abbie initiated the lease extension process just as the lease was nearing the all-important eighty-year mark. The transaction was concluded in June 2010. The freeholder’s fees were kept to an absolute minimum.
Dr J Vincent owned a purpose-built flat in Kensington in August 2007. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by 90 years. Similar premises in Kensington with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 invoiced monthly. The lease ran out on 3 July 2092. Given that there were 73 years left we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.
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 related to 1 flat. The unexpired term was 37.79 years.