Kimberley leases on domestic properties are gradually losing value. Where your lease has about 90 years left, you should start considering the need for a lease extension. If lease term dips under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Kimberley will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In certain circumstances you may not be entitled. There are also strict timetables and steps to follow once the process has commenced so it’s sensible to be guided by a conveyancer during the process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Kimberley 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.
Kyle owned a high value apartment in Kimberley on the market with a lease of a little over fifty eight years outstanding. Kyle informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Kyle to invoke his statutory right. Kyle obtained expert advice and secured satisfactory deal without going to tribunal and readily saleable.
Last Christmas we were approach by Ms Molly Martin , who was assigned a lease of a garden apartment in Kimberley in September 2008. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Comparable homes in Kimberley with 100 year plus lease were in the region of £166,400. The average ground rent payable was £60 billed yearly. The lease came to a finish in 2080. Given that there were 54 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 not including professional charges.
In 2014 we were approached by Mr Ibrahim Nelson who, having bought a studio flat in Kimberley in January 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Similar flats in Kimberley with 100 year plus lease were valued about £227,800. The average ground rent payable was £45 billed quarterly. The lease terminated in 2091. Considering the 65 years left we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including professional charges.