Kimberley leases on residential properties are gradually losing value. Where your lease has approximately 90 years remaining, you should start thinking about a lease extension. If lease term is under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Kimberley will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In certain circumstances you may not qualify. There are prescribed deadlines and formalities to follow once the process is initiated so it’s wise to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
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.
Jason was the the leasehold proprietor of a 2 bedroom flat in Kimberley being marketed with a lease of fraction over fifty eight years left. Jason on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jason to exercise his statutory right. Jason procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the flat.
Last Autumn we were e-mailed by Mr L Jackson , who was assigned a lease of a garden apartment in Kimberley in November 1997. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative residencies in Kimberley with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease expired in 2099. Given that there were 73 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.
In 2012 we were e-mailed by Mr and Mrs. C Michel who, having took over the lease of a one bedroom flat in Kimberley in February 1997. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Similar properties in Kimberley with an extended lease were worth £264,000. The mid-range amount of ground rent was £60 collected quarterly. The lease finished on 5 March 2079. Considering the 53 years left we calculated the compensation to the freeholder to extend the lease to be within £37,100 and £42,800 plus expenses.