It’s a harsh certainty that a Kingsdown residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Kingsdown property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term dips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Kingsdown will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 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 |
|---|---|
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Kingsdown 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.
16 months ago Jonathan, started to get near to the 80-year mark with the lease on his garden apartment in Kingsdown. In buying his flat twenty years previously, the length of the lease was of little interest. Thankfully, he recognised he needed to take steps soon on a lease extension. Jonathan was able to extend his lease at the eleventh hour in August. Jonathan and the freeholder eventually settled on a premium of £5,500 . If the lease had gone to less than eighty years, the price would have become more exhorbitant by at least £1,000.
Mrs F Martínez owned a garden apartment in Kingsdown in October 2008. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Identical homes in Kingsdown with 100 year plus lease were in the region of £256,600. The mid-range amount of ground rent was £60 billed annually. The lease end date was on 26 March 2078. Given that there were 52 years left we estimated the compensation to the freeholder for the lease extension to be within £39,000 and £45,000 not including costs.
Last Summer we were phoned by Mrs F Clark , who owned a recently refurbished apartment in Kingsdown in September 2006. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Identical residencies in Kingsdown with an extended lease were worth £218,000. The mid-range amount of ground rent was £45 collected quarterly. The lease terminated on 9 June 2089. Given that there were 63 years as a residual term we estimated the premium to the landlord for the lease extension to be between £17,100 and £19,800 not including professional charges.