The market value of a leasehold property in Kingston depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be finalised well before the 80 year threshold. Current legislation entitles Kingston qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service will provide you increased control over the value of your Kingston leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Austin, came seriously close to the eighty-year threshold with the lease on his two bedroom apartment in Kingston. In buying his flat two decades ago, the length of the lease was of no interest. Fortunately, he noticed he needed to take action soon on Extending the lease. Austin arranged for a lease extension just in the nick of time in May. Austin and the landlord who owned the flat above eventually agreed on sum of £6,000 . If he had missed the deadline, the sum would have gone up by a minimum £1,150.
In 2014 we were e-mailed by Dr Mollie Ricardo who, having purchased a first floor apartment in Kingston in August 2009. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Similar residencies in Kingston with a long lease were worth £264,000. The average amount of ground rent was £60 invoiced annually. The lease finished on 3 August 2079. Given that there were 53 years outstanding we estimated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 plus fees.
In 2012 we were approached by Mr and Mrs. W Bernard who, having purchased a one bedroom apartment in Kingston in October 2010. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Kingston with an extended lease were in the region of £220,400. The average amount of ground rent was £45 invoiced yearly. The lease lapsed in 2090. Considering the 64 years as a residual term we approximated the premium to the landlord to extend the lease to be between £16,200 and £18,600 exclusive of professional charges.