Unfortunately that a Kibworth residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Kibworth property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term slips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Kibworth will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold properties in Kibworth with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with procure Kibworth 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.
After protracted discussions with the freeholder of her ground floor flat in Kibworth, Kelsey initiated the lease extension process just as her lease was approaching the crucial 80-year mark. The transaction was finalised in January 2012. The landlord’s fees were kept to an absolute minimum.
Last Winter we were approach by Ms F Turner , who took over the lease of a one bedroom apartment in Kibworth in June 1996. The dilemma was if we could estimate the premium could be to extend the lease by ninety years. Similar premises in Kibworth with a long lease were in the region of £240,600. The mid-range ground rent payable was £60 collected monthly. The lease elapsed on 12 March 2088. Having 62 years outstanding we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 plus legals.
Last year we were phoned by Dr F Bonnet , who moved into a garden flat in Kibworth in January 2009. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Similar properties in Kibworth with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 collected per annum. The lease expired in 2077. Given that there were 51 years remaining we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of legals.