Kensington leases on residential deteriorating in value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. 80 years is a significant number: when the unexpired term of a lease dips below this level then you start incurring an additional element called marriage value. Flat owners in Kensington will mostly be legally entitled to a lease extension; however a solicitor will check if you qualify. In certain circumstances you may not qualify. There are also strict deadlines and formalities to follow once the process has commenced so it’s wise to be guided by a lawyer during the process.
Leasehold premises in Kensington with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
Lease extensions in Kensington can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Kensington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Alex owned a conversion flat in Kensington on the market with a lease of a few days over 59 years outstanding. Alex on an informal basis spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £125 annually. No ground rent would be payable on a lease extension were Alex to invoke his statutory right. Alex procured expert advice and secured an acceptable deal without going to tribunal and sell the property.
In 2011 we were e-mailed by Ms G Walker who, having moved into a first floor flat in Kensington in February 1995. We are asked if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparative homes in Kensington with an extended lease were valued about £242,600. The average ground rent payable was £45 invoiced per annum. The lease finished on 2 July 2093. Considering the 67 years as a residual term we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 plus professional charges.
An example of a Lease Extension decision for a Kensington flat 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 as at the valuation date was 37.79 years.