It’s a harsh truth that a Kington residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Kington property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term slips under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Kington will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Using our service gives you enhanced control over the value of your Kington leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy negotiations with the freeholder of her studio flat in Kington, Morgan initiated the lease extension process just as the lease was nearing the critical eighty-year mark. The transaction was concluded in June 2012. The freeholder’s charges were kept to an absolute minimum.
Last month we were approach by Mrs A Fournier , who completed a garden flat in Kington in October 2002. We are asked if we could approximate the premium could be to extend the lease by ninety years. Similar properties in Kington with an extended lease were worth £225,800. The mid-range ground rent payable was £60 billed per annum. The lease terminated in 2086. Having 60 years unexpired we estimated the compensation to the landlord for the lease extension to be between £25,700 and £29,600 exclusive of fees.
Last Spring we were e-mailed by Dr Shannon Morgan , who bought a first floor apartment in Kington in February 2005. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Comparable homes in Kington with 100 year plus lease were in the region of £210,000. The average ground rent payable was £50 billed yearly. The lease ended on 18 May 2106. Given that there were 80 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.