Killingworth leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Killingworth tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Killingworth you would be well advised to see if your lease has between 70 and ninety years remaining. There are good reasons why a Killingworth flat owner with a lease having around 80 years left should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Killingworth with in excess of 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 to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service will provide you better control over the value of your Killingworth leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Jake owned a 2 bedroom flat in Killingworth being sold with a lease of a little over fifty eight years outstanding. Jake informally spoke with his freeholder a well known local-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 a rise in the rent to £50 per annum. No ground rent would be due on a lease extension were Jake to invoke his statutory right. Jake procured expert advice and secured satisfactory deal without going to tribunal and sell the property.
In 2010 we were contacted by Dr G Ali who, having bought a purpose-built apartment in Killingworth in September 2008. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Comparative premises in Killingworth with a long lease were valued around £295,000. The mid-range amount of ground rent was £45 collected yearly. The lease ran out in 2099. Having 74 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.
Mrs L Parker bought a one bedroom apartment in Killingworth in September 1997. The question was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Identical premises in Killingworth with an extended lease were in the region of £243,000. The average amount of ground rent was £65 invoiced annually. The lease lapsed on 21 May 2088. Given that there were 63 years unexpired we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 not including professional charges.