The market value of a leasehold property in Kirkby is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be concluded well before the eighty year mark. Leasehold Reform legislation entitles Kirkby qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of 90 years. The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Kirkby with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| 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. |
| 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. |
| 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 lawyers that we work with procure Kirkby 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.
In the wake of 9 months of protracted discussions with the landlord of her purpose-built flat in Kirkby, Ella initiated the lease extension process as the eighty year deadline was swiftly coming. The transaction completed in November 2008. The landlord’s charges were restricted to below 600 GBP.
In 2009 we were approached by Mr Harvey Stewart who, having moved into a one bedroom flat in Kirkby in October 2002. The dilemma was if we could estimate the price could be to extend the lease by an additional years. Comparable flats in Kirkby with a long lease were in the region of £208,200. The mid-range amount of ground rent was £65 billed quarterly. The lease finished on 8 July 2086. Considering the 61 years remaining we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 exclusive of legals.
In 2011 we were e-mailed by Ms H Rodríguez who, having completed a basement apartment in Kirkby in May 2012. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by an additional years. Comparative residencies in Kirkby with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease ran out in 2097. Having 72 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.