Chances are that where you own a flat in Keston you actually own a long leasehold interest over your property
Leasehold properties in Keston with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant 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; |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Keston 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 conveyancer we work with provide it.
Last Winter Tyler, started to get near to the 80-year mark with the lease on his one bedroom flat in Keston. In buying his flat 19 years previously, the lease term was of no bearing. As luck would have it, he realised he needed to take steps soon on a lease extension. Tyler arranged for a lease extension just ahead of time in July. Tyler and the landlord in the end settled on the final figure of £5,000 . If the lease had slid to less than 80 years, the amount would have escalated by at least £975.
In 2009 we were phoned by Mr and Mrs. W Miller who, having took over the lease of a purpose-built apartment in Keston in May 1995. The question was if we could approximate the premium would be to extend the lease by an additional years. Comparative properties in Keston with an extended lease were worth £206,200. The average ground rent payable was £60 collected per annum. The lease expired on 11 July 2080. Given that there were 56 years remaining we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus fees.
An example of a Lease Extension decision for a Keston property is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The unexpired term as at the valuation date was 50.57 years.