The market value of Kimberley leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the unexpired lease term is less than eighty years
Leasehold properties in Kimberley with in excess of one hundred years remaining 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 home. In such circumstances there is often little upside in buying the reversionary interest 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake 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.
After protracted negotiations with the landlord of her one bedroom apartment in Kimberley, Georgia started the lease extension process just as the lease was approaching the crucial 80-year threshold. The lease extension was concluded in November 2014. The freeholder’s charges were kept to an absolute minimum.
Last Christmas we were contacted by Ms Amelia Bernard , who acquired a ground floor apartment in Kimberley in November 2003. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Comparable homes in Kimberley with an extended lease were valued around £235,200. The average ground rent payable was £45 invoiced monthly. The lease came to a finish on 23 July 2091. Taking into account 66 years unexpired we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including fees.
Last Autumn we were contacted by Mr P Michel , who purchased a recently refurbished flat in Kimberley in January 2011. We are asked if we could approximate the price would be for a 90 year lease extension. Similar properties in Kimberley with a long lease were worth £280,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease elapsed on 19 February 2102. Taking into account 77 years outstanding we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including legals.